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US pre-election GDP data: How strong is the economy?

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Gross Domestic Product (GDP) data released in the United States just before the elections indicate that the economy continues to grow, despite widespread pessimism.

GDP rose by 2.8% year-over-year in the July-September period, following 3% growth in the second quarter. A crucial measure of demand, which excludes volatile categories such as trade and inventories that provide limited insights into the economy’s health, also showed strength. Inflation-adjusted final sales to domestic purchasers increased to 3.5% from 2.8% in the previous quarter.

Consumer spending was a significant driver of this activity. Personal consumption expenditure grew 3.7% year-over-year, up from 2.8% in the second quarter, contributing nearly 2.5% to overall growth. Strong employment and wage growth appear to have supported this increase. Additional gains in exports and government defense spending also boosted GDP, while business spending on equipment saw a robust 11% increase.

White House response to economic data

On the other hand, continued deterioration in the housing sector, due to a slowdown in construction, negatively impacted the economy. Imports also showed a declining trend—typically, rising imports indicate strong consumer demand, but in this case, they negatively affected GDP calculations.

The Biden administration noted that this is the final quarter for GDP data releases before the next administration takes office, with fourth-quarter data scheduled for late January, post-inauguration. “Consumer spending and savings are both increasing, thanks to good job opportunities, rising real wages, and renewed optimism,” White House senior economic adviser Lael Brainard told reporters.

Economic indicators beyond GDP

Encouraging economic data extends beyond GDP. Payroll processor ADP reported a surprising acceleration in private sector job growth in October, with 233,000 jobs added, up from 159,000 in September, despite major hurricanes in the Southeast. This marked the strongest job growth in 15 months.

Simultaneously, the U.Sç stock market is on an upward trend, and the dollar is strengthening in currency markets.

Public rerception of the economy remains low

Despite positive official data, many Americans remain unconvinced. A recent Wall Street Journal (WSJ) poll revealed that 62% of respondents rated the economy as “not very good” or “bad.” Similarly, 56% of Americans believe the US.. is in a recession, and 72% think inflation is rising.

A new YouGov poll indicates that nearly half of Americans expect a “total economic collapse” in the next decade. 44% of respondents considered it likely, while 15% said it was “very likely” and 29% said it was “somewhat likely.” Conversely, 39% found it unlikely.

Income inequality reaches new heights

According to economist Michael Roberts, disposable personal income has decreased since Biden took office, while inflation has risen 21% from January 2020 levels. Mortgage rates are at their highest in 20 years, and house prices have reached record levels. Roberts also highlighted the surge in car and health insurance premiums.

Income and wealth inequality in the US is among the highest globally and continues to worsen. The top 1% of Americans receive 21% of all personal income, more than twice the share of the bottom 50%. Furthermore, 35% of all wealth is held by the top 1%, while the bottom 50% hold only 1%.

A deeper analysis of real GDP figures reveals why most Americans see limited benefits. Health care costs drive GDP growth, reflecting increased health insurance costs rather than improved care.

The manufacturing sector shows signs of contraction

Rising inventories of unsold goods point to potential weaknesses in the economy. According to the U.S. Manufacturing Purchasing Managers’ Index (PMI), manufacturing contracted for four consecutive months leading up to the November election.

Roberts noted that while the White House and mainstream economists emphasize low unemployment, most net job gains have been in part-time roles or government services rather than higher-paying full-time jobs in productive sectors. “If a worker must take a second job to maintain their standard of living, they may not feel as optimistic about the economy,” Roberts observed. Indeed, second-job rates have surged.

The irony of immigration policy

The ongoing presidential campaign has highlighted immigration policy as an economic issue. Roberts noted that much of the U.S.’s economic “outperformance” results from a significant increase in net migration—double the rate in the eurozone and triple that in Japan. The Congressional Budget Office projects a 5.2 million increase in the labor force by 2033 due to net migration, potentially adding $7 trillion in economic growth over the next decade.

Roberts called it “ironic” that immigration is a hotly debated issue. Although many Americans blame low real income growth on immigration, data suggests the opposite. Should immigration slow, or if a new administration restricts it further, US economic growth and living standards could suffer.

AMERICA

Judge orders Trump administration to preserve Signal chats about Yemen operation

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A federal judge ordered the Trump administration to preserve chats conducted by senior officials via the Signal messaging app, including messages mistakenly shared with a reporter earlier this month concerning an imminent military operation in Yemen.

US District Judge James Boasberg issued the ruling on Thursday at the request of a transparency group that sued, alleging the app’s auto-delete function risked destroying the messages in violation of the Federal Records Act.

During a brief afternoon hearing, Justice Department lawyer Amber Richer told Boasberg such an order was unnecessary because the relevant agencies were already taking steps to preserve the records. However, she did not object to the judge reinforcing this with a court order.

“We are still in the process of working with the agencies to determine what records they have, but we are also working with the agencies to preserve the records they do possess,” Richer said.

However, the government lawyer appeared to acknowledge a court filing made earlier in the day by a Treasury Department official, which suggested that Treasury Secretary Scott Bessent currently possesses only a portion of the message chain related to the Yemen strike.

The journalist added to the message chain, The Atlantic editor Jeffrey Goldberg, reported that the chat began on March 11. Yet, Bessent only has messages starting from the afternoon of March 15. It remains unclear why Bessent failed to preserve the earlier messages or whether other senior officials in the chat retained them.

Richer stated to Boasberg, “I want to note that we are still determining what records the agencies possess.”

The Atlantic published parts of the messages earlier this week and the remainder on Wednesday after the White House stated it did not consider the exchanges classified, even though they described the scope and timeline of a military operation that had not yet occurred.

According to The Atlantic‘s report, national security adviser Mike Waltz, who initiated the exchange, had initially set the messages to auto-delete after one week but later changed the duration to four weeks.

Speaking from the bench, Boasberg ordered the defendants in the case—Secretary of State Marco Rubio, Treasury Secretary Scott Bessent, Defense Secretary Pete Hegseth, Director of National Intelligence Tulsi Gabbard, and CIA Director John Ratcliffe—”to preserve all Signal communications between March 11 and March 15.”

This directive appears broader than just the messages shared with Goldberg; it could encompass other Signal messages sent or received by the officials during that period.

A Pentagon lawyer also submitted a written declaration stating the Defense Department was attempting to preserve these records as well but did not claim any records had been recovered. The administration suggested that The Atlantic‘s publication of the entire exchange, except for the redaction of a CIA officer’s name, ensured the messages’ preservation.

At the start of the hearing, Boasberg also responded to a social media post by President Donald Trump suggesting the judge had improperly gained control of the politically sensitive case.

Trump had called it “shameful” that the judge, an appointee of former President Barack Obama, was handling multiple legal cases involving the White House in recent weeks. In addition to the Signal case, Boasberg is presiding over a case involving Trump’s efforts to rapidly deport people using the Alien Enemies Act.

Boasberg addressed the matter, stating he “understood some questions had been raised” about how the court assigns cases. He explained that for the 15 active judges serving on the court, cases are randomly assigned across various categories in nearly all instances “to ensure a more even distribution of cases.”

Clerks use an electronic deck of cards within each category to determine which judge receives a newly filed case.

“That is how it works, and that is how all cases continue to be assigned in this court,” said Boasberg, who has served as the court’s chief judge since 2023.

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US revokes visa of Turkish PhD student Rumeysa Ozturk

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Turkish student Rumeysa Ozturk, pursuing a doctorate at Tufts University in Boston, Massachusetts, US, was detained on March 25.

Speaking about the incident, which gained attention in the US, Senator Marco Rubio confirmed that Ozturk’s visa had been canceled.

Rubio stated, “We gave you a visa to get an education; not to be a social activist who destroys our campuses. If you use your visa to do that, we will take your visa back. I encourage every country to do the same.”

The US Senator continued, “If you lie to get a visa, and then engage in this type of behavior after arriving here, we will cancel your visa. And when your visa is canceled, you are no longer legally in the US. Like any country, we have the right to deport you. It’s that simple.”

The Senator also announced that the visas of approximately 300 students had been similarly canceled.

Rubio asked, “It would be madness, even stupidity, for a country to let in people who say, ‘I’m going to go to your universities and start riots, occupy libraries, harass people.’ I don’t care what movement you are part of. Why should we accept that?”

Rubio said that individuals could carry out such actions “in their own countries, but not in the US.”

Last year, mass student protests occurred at many universities across the US to protest the administration’s support for Israel’s military operations in Gaza.

It is alleged that Ozturk, whose student visa was canceled, participated in “pro-Hamas” movements.

Rumeysa Ozturk’s lawyer, Mahsa Khanbabai, noted in a written statement to BBC Turkce that she was first able to speak with the young woman on the evening of March 27.

Referring to the moments of her client’s detention, the lawyer stated, “Nothing in this video indicates they were law enforcement officers or which agency they were from. This situation should deeply concern everyone.”

Khanbabai emphasized that Ozturk is a successful doctoral student at Tufts University on a Fulbright scholarship and stressed that the allegations of her being a Hamas supporter were “baseless.”

Video footage of Ozturk’s detention showed the doctoral student being surrounded by plainclothes officials on the street while heading to iftar.

The officials subsequently handcuffed Ozturk behind her back and led her to a vehicle.

In a written statement shared with BBC Turkce, Tufts University said, “We are in contact with the authorities. We hope Rumeysa will be given the opportunity to clear her name using her legal rights.”

Minister of Justice Yilmaz Tunc declared in his statement that he strongly condemned the detention, arguing the incident was “proof that there is no freedom of thought in so-called democratic countries and that human rights are not respected.”

CHP leader Ozgur Ozel also condemned the detention, stating in his post that “hundreds of students in Turkey arrested groundlessly and unscrupulously are experiencing the same victimization.”

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Trump announces 25% tariff on imported cars and parts

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US President Donald Trump announced that a 25% customs tariff will be applied to cars imported into the US.

Effective from April 2, the taxes also include car parts not produced in the US.

The President stated that the tariffs will be “permanent,” adding that there is nothing that would necessitate the removal of the import taxes.

Trump told reporters, “We will apply a 25% customs duty, but if you produce your car in the US, there is no customs duty. This means that many foreign car companies will be in a very good position because they have already established their facilities in the US.”

In a fact sheet released after Trump’s remarks in the Oval Office, the White House stated that car parts compliant with the US-Mexico-Canada (USMCA) trade agreement would remain exempt from customs duties “until Customs and Border Protection establishes a process to apply customs duties to their content outside the US.”

The US International Trade Commission examined in early 2024 the potential consequences if the government implemented comprehensive automotive tariffs. According to the report, a 25% customs duty applied to all US car imports would reduce imports by approximately 74% and increase average car prices by 5%.

Although President Trump’s increase in customs duties on imported vehicles will primarily affect foreign automakers, domestic automakers General Motors and Ford will also face a significant impact.

According to research by Wards Automotive and Barclays, Volvo (13%), Mazda (19%), and Volkswagen (21%) produce the lowest share of their vehicles sold in the US within the country.

Hyundai-Kia (33%), Mercedes (43%), BMW (48%), and Toyota (48%) also produce less than half of the vehicles they sell in the US domestically.

According to the Department of Transportation, examples of significant 2025 models imported into the US include the Ford Maverick pickup, Chevrolet Blazer crossover, Hyundai Venue crossover, Nissan Sentra compact car, Porsche 911 sports car, and Toyota Prius hybrid.

Approximately 45% of vehicles sold in the US are imported, with the largest share originating from Mexico and Canada.

According to data from the American Automobile Labeling Act, every 2025 model year vehicle sources at least 20% of its content from countries outside the US and Canada.

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