MARY REICHARD, HOST: Coming next on The World and Everything in It, the Monday Moneybeat.
NICK EICHER, HOST: First up today, the effects of the trade war.
The government last week rolled out some of the details of planned direct payments to American farmers, an aid package that’ll be worth $16 billion when it’s all paid out. That’s on top of an $11 billion package a year ago.
When President Trump this month increased tariffs on some Chinese imports to 25 percent, Beijing retaliated with tariffs on American agricultural exports.
The aid package will come in three separate payments: the first one coming in July or August. The American secretary of agriculture says he wants that payment as soon as possible because he thinks it’s unlikely the trade dispute will be settled by summer.
The aid to farmers is designed to soften the blow of those tariff costs.
Speaking of those costs, everybody is feeling the effects in some way, and economists at the Federal Reserve have calculated them. The cost to the typical American household of the trade war is just under $1,000 a year, specifically $831 to pay the economic and direct costs of the trade dispute between the United States and China.
REICHARD: On Wall Street, trade-war worries sent the markets down for the third straight week. Each of the major stock indexes lost value.
The Standard & Poor’s 500 dropped 1.2 percent.
The Dow Jones industrials fell seven-tenths of a percent.
The Nasdaq lost 2.3 percent.
And the Russell 2000 gave up 1.4.
EICHER: A couple of reports from the Commerce Department last week gave economists reason for concern over economic growth. The housing market showed a sign of weakness in April. More about that in a minute. But overall sales of durable goods plunged last month 2.1 percent. Durable goods are defined as items made to last three or more years.
Dramatically lower sales of aircraft drove down sales of durables, as did sales of cars and auto parts. Analysts say the controversy over the new Boeing 737 Max had an outsized effect. Aircraft orders are highly volatile and aren’t a good gauge of the health of the market. Cars and auto parts however are, and those sales fell 3.4 percent. That’s the biggest decline in a year.
Now, about housing. New home sales dropped almost 7 percent in April, led by a decline in the sales of homes under $300,000. These are homes typically favored by middle-income and first-time home buyers. The silver lining there is that year over year, overall home sales are 6.7 percent higher in 2019 versus 2018.
And that is today’s Monday Moneybeat.