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Understanding Friday's Economic News

Jul 28, 2018

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The U.S. economy is doing well. The Commerce Department reported yesterday gross domestic product grew at a rate of 4.1 percent in the last quarter. That's faster than expected. And unemployment is low. President Trump takes credit.

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When Adam Stephens walked into his office in Milwaukee one morning in late June, he found messages complaining about the Birds. The deputy city attorney was not amused.

He went for a walk. "Within a couple of minutes, I found one parked on a sidewalk and was able to visually examine it and kind of figure out what it was," Stephens says.

Bird is the name of an electric scooter company. Unannounced, it dropped off somewhere between 70 and 100 rental scooters throughout Milwaukee, where it's illegal to ride motorized scooters in public.

GDP, OMG!

Jul 27, 2018

The gross domestic product is a measure of all the goods and services an economy produces. For the second quarter of this year, the U.S. economy grew at a stellar rate of 4.1%. Today on the show, we take a deep dive into everybody's favorite economic indicator: How is it measured? Why is it so high? Will it continue?

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President Trump has been pledging that his policies will ramp up economic growth. His goal has been to double the growth rate of recent years to about 4 percent sustained annual growth. Now, it happened, and it was announced today, and he's taking credit.

In Dakar, Senegal, people can't just flush their poop away. As is the case in many places in the world, it is pretty common for toilets to flush into a septic tank that needs to be emptied every so often.

And there are two ways to do it: the "cheap guy" — or the cartel that deals exclusively with raw sewage.

An example of the "cheap guy" is a man who calls himself Djiby. He says he is a baay pelle, which means "the father of the shovel." Father Shovel scoops out the septic tank with his shovel and bucket, and then he empties the bucket into a hole in the street.

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Updated at 6:30 p.m. ET

The New Yorker magazine has published an article by Ronan Farrow detailing accusations of sexual harassment by CBS CEO Les Moonves and other men at the company.

Updated at 4:35 p.m. ET

Social media companies have not had a good week in the stock market.

A federal appeals court handed workers in Birmingham, Ala., a significant win this week. The city is in a battle against state lawmakers over whether it has the right to raise its minimum wage.

The Birmingham workers and the Alabama legislature have been fighting in court since the city voted to increase its minimum wage to $10.10 an hour, from $7.25, in February 2016. That hike never took effect. The state legislature swiftly passed a law barring municipalities like Birmingham from setting their own minimum wage.

Friday News Roundup - Domestic

Jul 27, 2018

With guest host John Donvan.

The peregrinations of President Trump again lead the News Roundup this week. And there was a lot to cover.

Secretary of State Mike Pompeo testified in front of the Senate Foreign Relations Committee on Wednesday. In front of some skeptical senators, Pompeo suggested that the president had been tough on Russia.

Nuclear power plants in Europe have been forced to cut back electricity production because of warmer-than-usual seawater.

Plants in Finland, Sweden and Germany have been affected by a heat wave that has broken records in Scandinavia and the British Isles and exacerbated deadly wildfires along the Mediterranean.

GDP Is Up 4.1 Percent: What That Means

Jul 27, 2018

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Updated at 10:07 a.m. ET

The U.S. economy had a blockbuster second quarter, with growth surging to a 4.1 percent pace, the Commerce Department said Friday. That was nearly double the first quarter rate of 2.2 percent and the strongest pace in nearly four years.

President Trump has been steadfastly claiming that his policies will catapult the U.S. economy into a much higher rate of growth — 4 percent over the next few years.

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Steve Tramell remembers when the news got out in 2006 that Kia was planning to open a plant in West Point, Ga., population 3,700.

"The excitement in downtown was wild," says Tramell, the city's mayor. "The signs that were popping up in people's yards: 'Thank Jesus for Kia.' You know, things like that. It was really neat."

It's hard enough for employers to find workers to fill open jobs these days, but on top of it, many prospective hires are failing drug tests.

The Belden electric wire factory in Richmond, Ind., is taking a novel approach to both problems: It now offers drug treatment, paid for by the company, to job applicants who fail the drug screen. Those who complete treatment are also promised a job.

Mark Twain was a literary giant — but a horrible investor. John Maynard Keynes was one of history's greatest economists, but his genius for economics was less helpful to his own investment choices than his mental flexibility. Warren Buffett's investment track record is almost without equal, but he once made a $6 billion mistake.

On today's show, we speak with Michael Batnick, author of Big Mistakes: The Best Investors and Their Worst Investments, about the mistakes made by these famous investors and the lessons we should all learn from those mistakes.

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All right, let's take a step back now and examine something else President Trump said yesterday after his meeting with the European Commission president.

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For months now, President Trump has been saying tariffs would lead to better trade deals for the U.S.

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Updated at 4:10 p.m. ET

A data-sharing scandal and privacy concerns appear to be taking a toll on Facebook.

Its stock dropped nearly 20 percent Thursday — a day after the company released earnings showing that its user growth has stalled and told investors that it expects revenue growth to slow for the rest of the year.

With a loss of more than $100 billion in its value, the social media giant had one of its worst trading days.

Pedraam Faridjoo of Kensington, Md., is spending his summer volunteering and traveling. Ryan Abshire from Carmel, Ind., is using the time to be with his family. Meme Etheridge of St. Simons Island, Ga., is attending a music camp where she plays percussion.

What do they all have in common? They're teenagers, and they are not working summer jobs.

A summer job, like lifeguarding or scooping ice cream, used to be a rite of passage for teens. Thirty years ago, nearly two-thirds of U.S. teenagers worked summer jobs. Twenty years ago, more than half of them did.

President Trump is eager to tout a fast-growing economy, boosted by the tax cuts he pushed through Congress. That makes Friday morning's report on gross domestic product a highly anticipated news event.

Did GDP growth top 4 percent in the second quarter — more than double the first-quarter pace — as many economists project?

Forecasts are all over the board, with estimates even among Federal Reserve economists diverging widely.

The events of 10 years ago show why these forecasts are so important.

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