Finally, Americans are starting to believe in the economy again | ||
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Americans finally believe they're going to get a raise. On Friday, we learned that consumer confidence is back to near its highest level of the year. But the really encouraging part of the report was the outlook for wages. Friday's report showed that consumers expect their incomes will rise 2.2% over the next 12 months, the most since 2008. And while a rash of data has indicated that wage increases are either here or coming soon, belief from the American consumer that this will come to fruition is perhaps the most important part of the current economic puzzle. Nearly 70% of GDP comes from consumer spending, and while standard economic thinking would dictate that increases in wages — or, say, a decline in gas prices like we've seen in the last year — would boost spending, consumers aren't economists. Consumers act as much on things like faith and confidence as they do on incremental changes in their paycheck. In a note to clients following Friday's consumer confidence report, Paul Ashworth at Capital Economics wrote that, "Presumably improving labour market conditions outweighed the impact of higher energy prices and rising long-term interest rates." Which shouldn't be all that much of a surprise.
And while these are data points economists and market watchers pay attention to, the reality is that most Americans aren't all that aware of what the economic data is saying. Most Americans simply know how things are going for them, and so any signs that they expect their own situations to get better means things will probably get better for the economy more broadly. This is what economists call the "virtuous cycle" wherein higher wages leading to inflation leading to growth, and so on. But the reality is that Americans are be fickle. This week we got data from the New York Fed that indicates consumers plan to boost their spending by the least in about two years. This, of course, has to do with consumers' outlook for inflation, which is relatively flat. Economic thinking, however, would indicate that higher wages are likely to lead to inflation. This, of course, is what the Federal Reserve wants to see.
For the last several years, inflation has been running well below the Fed's target, but with wage pressures cropping up in more and more, inflation — and Fed action — could be right around the corner. And so again we are left with the constant struggle between what economists think will happen and what actually does. And at the center of this tension is you, the American consumer. The numbers have painted a picture that shows things are getting better for American workers. And now it looks like they're starting to believe it, too. SEE ALSO: Ignore this at your own peril Join the conversation about this story » NOW WATCH: 6 scientifically proven features men find attractive in women  | ||
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You watch the gas pump much more closely when you're either out of a job or not getting a raise. 
The Fed has been fairly clear that it 3 big assumptions in the anti-ISIS fight have all turned out to be false | ||
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The efforts of a US-led coalition fighting the Islamic State terror group in Iraq and Syria have been centered around three big assumptions that haven't held up very well over the past year, according to a note from The Soufan Group. It's been one year since the fall of Mosul in Iraq — which was part of the group's major rampage of seizing territory across Iraq and Syria — and Iraqi forces still aren't close to getting it back. US officials have faced criticism about the Obama administration's strategy, which is built around certain key assumptions that haven't panned out. The Soufan Group notes that the assumptions are:
The Obama administration recently announced an expansion of its strategy to defeat the Islamic State (also known as ISIS, ISIL, and Daesh). The US reportedly plans to send 450 more troops into Iraq to train security forces to take back Ramadi in the Sunni-dominated Anbar province. Last month, ISIS militants overran the provincial capital, and they still maintain control of the city. The operation to retake Mosul, which officials had previously said would be underway this spring, has now been shelved until 2016, according to The New York Times. "Immediately after the fall of Mosul, the focus was on re-training the Iraqi military, with the ethos of 'helping them fight their own fight' — ignoring that almost limitless resources had already been thrown at this issue and that the policy had failed every true test," The Soufan Group noted.
It's now apparent that the Iraqi army isn't an effective fighting force against ISIS, and the Shiite-dominated government in Baghdad is reluctant to arm and train Sunnis out of fear that they might one day turn on Baghdad. And experts say that in order to truly build up and reform Iraq's army into a force that can take down ISIS, Sunnis need to be a major part of the equation. Furthering the tensions is the fact that Shia militias backed by Iran, which is trying to extend its influence throughout the Middle East, are vying to lead the ground fight against ISIS in Iraq. These militias have been accused of committing atrocities against Sunni civilians in areas they liberate from ISIS. Basically, the country's Sunnis have nowhere to turn and don't trust the government, while Baghdad has a battered Army and must rely on sectarian Shia militias backed by Iran. And the US is caught in a lose-lose situation. "If the US circumvents Baghdad to equip and train the Sunnis directly, it will have to abandon or seriously weaken the entire political construct it set up after the fall of Saddam," The Soufan Group noted. "This is a step too far for the US for many reasons, and so the training has stalled somewhere between Washington and Baghdad. In between the reality and the reluctance, the Islamic State has found sanctuary and room to 'remain and expand.'"
Another key part of the plan to defeat ISIS — stemming the flow of foreign fighters into Iraq and Syria by countering ISIS propaganda — isn't working out as well as the US had hoped. "An internal State Department assessment paints a dismal picture of the efforts by the Obama administration and its foreign allies to combat the Islamic State’s message machine, portraying a fractured coalition that cannot get its own message straight," The New York Times reports. Countering the group's propaganda on the internet, and social media in particular, is crucial to preventing thousands of foreigners from deciding that living in ISIS territory, which the group markets as an Islamic utopia, and fighting for the group's cause is a good option.
"These efforts have for the most part failed. The Islamic State retains both its 'jihadi cool' persona and its ability to connect the merely curious supporters with the actually serious. "While governments have sought a one-size-fits-all approach to counter the group’s appeal, the Islamic State has embraced the panoply of individual motivations that spur recruitment." ISIS' media wing is very savvy and their propaganda and recruiting efforts very deliberate. They target different groups of people — some ISIS recruits searching for meaning in their lives might be attracted to the group's religious message, while others might be wooed by the "five-star jihad" image of weapons and BMWs. The Soufan Group concluded: "The year since the fall of Mosul has witnessed an increased appreciation of the systemic threat of the Islamic State even if it has not yielded a systemic solution that rests on realistic assumptions. ... The challenges for the next year require significant shifts in assumptions and commitments." SEE ALSO: The startlingly simple reason Obama ignores Syria Join the conversation about this story » NOW WATCH: Why Putin is the most powerful man in the world  | ||
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"Interacting with the group’s supporters online, trying to out-snark teenagers or persuade them with reason, governments tried to engage the small but meaningful percentage of people vulnerable to the Islamic State’s contradictory message of hate and inclusion," The Soufan Group noted. Britain is no longer a nation of young boozers | ||
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Young people in the UK are drinking less and less booze, according to data released by the Office for National Statistics. Twenty-percent of 16-24 year olds said they were teetotallers in 2013, the latest year the ONS gives data for. That's the highest proportion in eight years and the same percentage of non-alcohol drinkers as in the 65 and over age group.
The proportion of young people binge drinking, i.e. drinking a lot of alcohol in one session, is also falling steadily as shown by the graph below.
Binge drinking among young people was a major issue in the mid-2000s but efforts to crackdown on it and educate people on its dangers appear to have worked. Finally, the percentage of 16-24 year olds drinking frequently, which means drinking on five or more days a week, is also falling.
You can see the full binge drinking release here. Join the conversation about this story » NOW WATCH: Two models in Russia just posed with a 1,400-pound bear  | ||
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Reality starlet weds Swedish prince | ||
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Stockholm (AFP) - Hundreds of Swedes gathered in the hot summer sun on Saturday to watch former reality show starlet Sofia Hellqvist become a real-life princess when she marries Prince Carl Philip in a lavish Stockholm wedding. Royal watchers clutching blue and yellow national flags pitched rugs and deck chairs along the route that the newlyweds will take after exchanging vows and before returning to the palace for a 21-gun salute and wedding banquet. About 550 guests will attend the ceremony including Britain's Prince Edward, Earl of Wessex and Princess Takamado of Japan. The celebrations marking Sweden's latest royal wedding began Friday evening with a boat ride across the sparkling waters of Stockholm bay and a dinner on a small city centre island. Hellqvist, a slender and elegant brunette, is a 30-year-old commoner known for her infectious gap-toothed smile and easygoing ways. Her fiance, 36-year-old Carl Philip, is the second child of King Carl XVI Gustaf and Queen Silvia and holds the title of Duke of Varmland. He is third in line to the throne, behind his elder sister Crown Princess Victoria -- who also married a commoner -- and her three-year-old daughter Princess Estelle. The prince will keep his title thanks to a change of rules in 1980 which also makes Hellqvist a princess through marriage. "It is the first time a woman of the people marries a prince who is also marrying a princess," royal historian Goran Alm told public broadcaster SR. A glamourous and openly affectionate couple equally known for their sporty lifestyle, Carl Philip and Sofia are keen to project an image of themselves as modern and open royals, and are often seen running errands in town or picking up pizza to go in Stockholm's chic neighbourhoods. The Swedish media revealed the prince's budding relationship with the former glamour model in 2010, titillated by her racy past. Hellqvist took part in 2005 in the Swedish reality show "Paradise Hotel", where young scantily-clad men and women stay at a luxury resort and compete to be the last contestant voted off the show amid intrigue, scheming and drama. The year before that, at age 20, she had posed topless with a boa constrictor for the men's magazine Slitz, winning its Miss Slitz title.
- 'I don't regret anything' -
The Swedish media was quick to publish the photos when the couple's engagement was announced in June 2014. While the pictures may have raised a few eyebrows, Hellqvist's colourful past hasn't led to any major controversy. "It's a shame there's still so much written about that," she told Swedish Television in a documentary about the royal family in January, referring to the racy photos. "It was 10 years ago, I've gotten on with my life since then...I don't regret anything," she said. Raised in a middle-class family in the small central Swedish town of Alvdalen, Sofia left Sweden for New York in 2005 where she studied accounting and worked as a yoga teacher and waitress before returning to Sweden. In 2010, she and a friend founded the "Project Playground" charity to help disadvantaged children in South Africa, after having worked as a volunteer in several African countries. She left her position with the organisation in March to focus on her new duties as princess following the wedding. Contrary to her brother-in-law Chris O'Neill -- an Anglo-American businessman married to Carl Philip's sister Princess Madeleine and who often snubs royal events -- Sofia is popular among Swedes who admire her candour and commitment.
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Tiger Woods aims to regroup at US Open after Memorial debacle | ||
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Tacoma (United States) (AFP) - Tiger Woods insists he's making progress, reinventing his game for what seems like the umpteenth time, but the 85 he shot at The Memorial last weekend seems to indicate otherwise. "I have had times like this in my life where I've gone through these periods," said Woods. "But you just have to fight through it. "I am committed to what I am doing and committed to the changes and once I start to snowball and start getting more solidified then that is when things start coming together." The 14-time major winner Woods, who will turn 40 in December, started working with swing coach Chris Como seven months ago and has been trying to implement several swing changes to his game. But it has been a much more difficult learning curve than he anticipated as it seems that for every step Woods takes forward, he takes two backwards. "You just don't go from one to 10," he said. "We are taking it 1, 2, 3, 4, all the way to 10." Woods heads into next week's 115th US Open after having endured the worst round of his career at Muirfield Village when he shot a 13-over-par 85 before closing with a 74. He completed four rounds in last place at 14-over 302. He also endured playing as a single and having to remove his own flagsticks while his caddie was busy raking bunkers that had swallowed up Woods's errant approach shots. To add insult to injury, on Monday Woods officially fell to 181st in the world rankings and he is 196th place in FedEx Cup playoff points. The 85 he shot at The Memorial is 20 strokes off his best career round at a US Open which he shot in 2000 at Pebble Beach when he recorded the first of his three US Open triumphs. He also won in 2002 and 2008. His best finish this year was 17th at The Masters. He has teed it up just five times in the 2015 season, including a withdrawal from the Farmers Insurance Open in February with back problems. Woods' 15-stroke win at the 2000 US Open stands as the largest margin of victory in tournament history. His 2008 US Open win at Torrey Pines was achieved on one good leg and remains the last Grand Slam victory he can hang his hat on. Despite the Memorial meltdown, Woods says his game is headed in the right direction. "You can call it progression, baseline shifts, you can call it any terms you want, but what it is is that I am taking it step by step above the game plan we have and we have formulated for me to get better and get back to where I want to be in the game of golf." His low world ranking means he is not eligible for the WGC-Bridgestone Invitational in August and he needs to improve to 125 or better in order to play in the FedEx playoff events. "I am playing more. I am finally healthy enough to do it," he said. "My back is good enough to do it so I am committed to playing more golf all summer. "Now I just need to get my ranking up high enough so I can get into some of these events and continue playing. "I think I have won the Firestone eight times and I am not in that event. I need to obviously start playing a little bit better to get into that event and then to get into the playoffs. That's not guaranteed." Woods played a round earlier this month at Chambers Bay, a new untested course, located 50 kilometres (30 miles) southwest of Seattle. He took more than nine hours to finish 18 holes as he took his time to study the links-style layout and then said it lived up to its reputation as a sturdy test. "It is very challenging," said Woods. "I have seen footage of the US Amateur there. They had 300-plus rounds the first two days of the qualifier and three guys shot under par. That's how it can play." Former PGA Tour player Notah Begay believes Woods can reinvent himself as long as he stays healthy and remains hungry for wins. "I do think players can reinvent themselves. They have to," said Begay. "Because it is a way to maintain a certain type of motivational focus that is required to play the game at the highest level. "I think the challenge here is motivation. Seventy-nine times he's won, 14 majors, he beat everybody, everywhere around the world and it is tough to find the motivation to get up and go out and do it again. "Motivation and health are two big factors." Woods knows that ultimately it's about convincing himself. "I got a lot of work ahead of me. I'm looking forward to it," he said. Join the conversation about this story »  | ||
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