Report: Economic growth ‘modest’ in 2Q

WASHINGTON (AP) — The U.S. economy grew at a modest 2% annual rate in the second quarter, a pace sharply lower than the 3%-plus growth rates seen over the past year. Many analysts believe growth will slow further in coming quarters as global weakness and rising trade tensions exert a toll.

The April-June increase in the gross domestic product, the economy’s total output of goods and services, slipped from a brisk 3.1% gain in the first quarter, the Commerce Department reported today.

The government’s third and final look at second-quarter GDP growth was the same as the previous estimate, although the components were slightly altered. Consumer spending and business investment rose at slower rates than previously estimated, but this was offset by slightly stronger gains in government spending and exports.

In the current quarter, analysts believe GDP is likely growing at the same modest 2% rate, and they are forecasting a similar outcome in the final quarter.

For the year, GDP is expected to rise around 2.2%, down from the strong 2.9% gain seen last year, which had been the best performance since 2015.

President Donald Trump, who is counting on a strong economy to boost his re-election bid, has called the economy’s performance the best ever. But after a spurt in growth last year due to the president’s $1.5 trillion tax cut program, growth has slowed noticeably to slightly below the 2.2% annual growth rates turned in during the current economic expansion.

While the economic recovery from the Great Recession is now in its 11th year, the longest in U.S. history, it has been the slowest in terms of annual growth rates, a fact economists attribute to slower growth in the labor market, due to the retirement of baby boomers, and a slowdown in productivity.

Trump, however, repeatedly attacked Obama administration economic policies for the lackluster GDP rates and pledged to achieve annual growth above 3% with his economic program of big tax cuts, deregulation and tougher enforcement of trade laws.

The economy has achieved four quarters of 3%-plus GDP rates since Trump took office in early 2017, but economists doubt that this pace can be achieved on a sustained basis given the labor force and productivity issues facing the country.

This year’s expected slowdown has been attributed to a fading of the impact of the Trump tax cuts as well as adverse effects of Trump’s trade war with China.

Mark Zandi, chief economist at Moody’s Analytics, said that if Trump carries through with an escalation of the tariffs nest month and in December, it could be enough to push the country into a recession next year.

“It all hinges on the president and what he decides to do with trade,” Zandi said. “If he follows through on this tariff threats later this year, then in all likelihood growth will slow and we would end up in a recession next year.”

Zandi is forecasting that GDP growth this year will slow to 2.3% and then slow further to 1.6% next year, but that is based on no escalation in the trade war with China.

The GDP report showed that consumer spending, which accounts for 70% of economic activity, came in at a sizzling rate of 4.6%, the best quarterly performance since late 2014, but down slightly from last month’s estimate of a 4.7% rate of gain for consumer spending.

Spending by the federal government and state and local governments increased at a 4.8% rate in the spring, up from last month’s estimate of a 4.5% gain.

In a separate report, the Labor Department said Thursday that the number of Americans filing initial claims for unemployment benefits, a proxy for layoffs, rose by 3,000 last week to 213,000. That is still a low level indicating a strong labor market.

Mahomes continues to evolve

KANSAS CITY, Mo. (AP) — The Kansas City Chiefs faced a crucial third-and-long with just under two minutes to go, clinging to a 33-28 lead over the Baltimore Ravens and hoping to put the game away.

Patrick Mahomes dropped back to pass, looked left and lured the entire defense that direction, then flicked the ball the other direction. Backup running back Darrel Williams had slipped out the back side and was open, taking the screen pass for a first down and clinching the Chiefs’ 3-0 start.

It wasn’t Andy Reid’s call, though. Or a brilliant move by offensive coordinator Eric Bieniemy.

“That was Pat’s play,” Reid said. “He has the whole game plan and Saturday night we go through it and we hit those type of situations — ‘What would you like?’ — and we ask each quarterback what they would like if it was this situation. So, it’s a four-minute situation, third-and-10, and so that was his play for that situation, but that was already in the game plan.”

The ability of Mahomes to recognize what the Ravens were doing on defense, digest the magnitude of the situation and make the right call represents another step in his development.

He doesn’t just take the call from the sideline anymore. He understands why the calls are made, why they are designed the way they are, and what situations are best to use them.

“It’s actually a pretty cool story,” said Mahomes, the reigning league MVP, who threw for 374 yards and three TDs against the Ravens. “It just shows that every detail matters. We talked about that play the night before and you think people would let that go after not calling it for a couple years now, but we had it prepared, we called it and we succeeded.”

That’s not all that went into such a seemingly simple play.

“We set it up last week (against Oakland) by running the little pump-pass out there and so we knew, especially with the Ravens — they had a good veteran group of guys — they saw the formation and thought we were going that way,” Mahomes explained, “and we were kind of able to slip out the back.”

WHAT’S WORKING

The passing offense. The rushing offense. Special teams. Heck, even the defense is playing pretty well, holding the Ravens’ Lamar Jackson in check most of the way Sunday. A good chunk of his numbers came in the fourth quarter, when he was trying to rally Baltimore from a 30-13 hole.

WHAT NEEDS HELP

The Chiefs’ suspect secondary fared well against the Ravens, leaving the defensive line as the only group that underwhelmed. Mark Ingram eclipsed 100 yards rushing and scored three TDs, and more than once the Kansas City defensive ends lost containment and Jackson was able to get loose.

“When you’re looking at a guy who got all the comparisons to the best running quarterbacks of our time and the past, it’s very hard,” the Chiefs’ Frank Clark said. “He gave us all he could do and we found a way as a defense. Our offense kept putting up points, kept doing what they had to do. Pat had another amazing day and we’re just playing great team football right now.”

STOCK UP

Rookie wide receiver Mecole Hardman hauled in an 83-yard touchdown reception, had another nice grab and even made the fair catch on the dropkick in the closing minutes that helped the Chiefs put away the game. It was the first time Hardman has flashed his game-breaking potential.

STOCK DOWN

Another rookie, Darwin Thompson, did little with the chances he got at running back. The Chiefs instead leaned on Williams to back up LeSean McCoy with starter Damien Williams out with a knee injury.

INJURED

McCoy aggravated his sore ankle late in the game, but otherwise the Chiefs came out of Week 3 in good shape. Williams, wide receiver Tyreek Hill (collarbone) and left tackle Eric Fisher (groin) keep improving and should be back at some point this season.

KEY NUMBER

210: That’s the number of wins Reid has in his coaching career, breaking a tie with Chuck Noll for sixth most in NFL history. The Patriots’ Bill Belichick (295) is the only other active coach with at least 200. Next on the list is the Packers’ Curly Lambeau with 229.

NEXT STEPS

The Chiefs hit the road for the third time in their first four games when they head to Detroit on Sunday. After that come three prime-time games in the following four weeks.

NCAA suspends response deadline

RALEIGH, N.C. (AP) — The NCAA is suspending its deadlines for schools to respond to charges levied by the governing body in the wake of college basketball’s corruption scandal.

In a letter obtained by The Associated Press in a public-records request, infractions committee member Carol Cartwright wrote NCAA vice president of enforcement Jon Duncan last week to say the committee “will not act” on cases until Nov. 20. She also wrote that all “briefing deadlines” are on hold during that time, such as the 90 days schools or individuals have to respond to charges outlined in a Notice of Allegations (NOA).

North Carolina State and Kansas both face discipline from the NCAA after being named in a federal criminal case involving improper payments to recruits and their families, which grew out of an FBI investigation into apparel company Adidas.

Kansas said it received a notice from the NCAA just this week, and N.C. State was charged in July. Hall of Fame Kansas coach Bill Self and former N.C. State coach Mark Gottfried both face possible top-level counts.

Cartwright’s letter states the committee’s “preference” is for no additional notices to be filed before Nov. 20, even while acknowledging “more cases will follow in the coming months.”

N.C. State released a copy of the letter Tuesday evening among numerous case documents in response to a records request. The NCAA charged the school in July with four violations, including the potential top-level counts against Gottfried and former assistant coach Orlando Early tied to guard Dennis Smith Jr., who played one season for the Wolfpack before leaving for the NBA.

The school was due to file its response Oct. 7 as the first of the cases to come through the NCAA infractions process.

“We will follow the guidance and recommendation of the NCAA,” N.C. State athletics spokesman Fred Demarest said when asked about Cartwright’s letter.

NCAA spokeswoman Emily James declined to comment when reached by the AP on Tuesday night.

Cartwright’s letter states it will “apply to all infractions cases connected” to the federal corruption investigation into the sport, which became public in fall 2017. The same deadline stipulations will apply to any related notices issued by the NCAA enforcement staff before Nov. 20, while she will determine “next steps” in pending cases after that date, according to the letter.

Cartwright, the former president of Bowling Green and Kent State universities, wrote the letter as part of an effort to “better manage” the complex cases following the federal criminal case that touches numerous schools including Arizona, Auburn and Louisville.

Most notably in N.C. State’s case, the NCAA alleged that Early provided Smith and his associates with about $46,700 in improper inducements and benefits — including $40,000 that a government witness testified he delivered to Early, intended for Smith’s family, in 2015.

Gottfried was charged under the NCAA provision of head-coach responsibility for violations within his program.

The documents released by N.C. State also included a memo summarizing school officials’ April interview with Smith, who’s now with the New York Knicks.

“He said neither he nor his family ever received any cash from anyone at N.C. State,” the memo states, adding that Smith said he “would not have been driving his grandmother’s car” had he accepted money.

Additionally, the school said it had planned to release phone records for Gottfried, now the head coach at Cal State Northridge. But attorneys for Gottfried successfully obtained a temporary restraining order in a Wake County court Tuesday afternoon preventing the release of the records.

In a court filing, Gottfried’s attorneys argued the records shouldn’t be released without Gottfried being able to first review and redact records of personal calls unrelated to his job as N.C. State’s former coach.

Elliot Abrams, a Raleigh-based attorney representing Gottfried, declined to comment Tuesday night. A court hearing in that matter is scheduled for Monday.

Democrats begin impeachment drive

WASHINGTON (AP) — Washington plunged into an impeachment crisis today, as House Democrats opened an investigation into President Donald Trump’s campaign season dealings with Ukraine. Trump repeatedly prodded Ukraine’s president to look into Democratic rival Joe Biden, according to a rough transcript released by the White House.

“Whatever you can do with the attorney general would be great,” Trump said in the summer phone call. He was referring to Attorney General William Barr, the nation’s top law enforcement official.

The president’s words set the parameters of the political debate to come, with Trump dismissing it as routine and Democrats saying that it laid the predicate for an impeachment inquiry.

The release came against the backdrop of Trump’s meetings with world leaders at the United Nations, a remarkable split screen even for the turbulence of the Trump era. On Trump’s schedule Wednesday: a meeting with Ukrainian President Volodymyr Zelenskiy, whose contacts with Trump are now central to the impeachment inquiry.

House Speaker Nancy Pelosi launched the formal impeachment inquiry on Tuesday, yielding to mounting pressure from fellow Democrats and plunging a deeply divided nation into an election year clash between Congress and the commander in chief. The probe injects deep uncertainty into the 2020 election campaign and tests anew the nation’s constitutional system of checks and balances.

Trump, who thrives on combat, has all but dared Democrats to take this step, confident that the specter of impeachment led by the opposition party will bolster rather than diminish his political support.

“There has been no President in the history of our Country who has been treated so badly as I have,” he tweeted Wednesday from New York. “The Democrats are frozen with hatred and fear. They get nothing done. This should never be allowed to happen to another “President. Witch Hunt!

While Pelosi’s announcement adds weight to the work being done on the oversight committees, the next steps are likely to resemble the past several months of hearings and legal battles — except with the possibility of actual impeachment votes.

Her brief statement, delivered without dramatic flourish but in the framework of a constitutional crisis, capped a frenetic weeklong stretch on Capitol Hill as details of a classified whistleblower complaint about Trump burst into the open and momentum shifted toward an impeachment probe.

For months, the Democratic leader has tried calming the push for impeachment, saying the House must investigate the facts and let the public decide. The new drive was led by a group of moderate Democratic lawmakers from political swing districts, many of them with national security backgrounds and serving in Congress for the first time. The freshmen, who largely represent districts previously held by Republicans where Trump is popular, risk their own reelections but say they could no longer stand idle. Amplifying their call were longtime leaders, including Rep. John Lewis of Georgia, the civil rights icon often considered the conscience of House Democrats.

“Now is the time to act,” said Lewis, in an address to the House. “To delay or to do otherwise would betray the foundation of our democracy.”

At issue are Trump’s actions with Ukraine. In a summer phone call with Zelenskiy, he asked for help investigating former Biden and his son Hunter. In the days before the call, Trump ordered advisers to freeze $400 million in military aid for Ukraine — prompting speculation that he was holding out the money as leverage for information on the Bidens. Trump has denied that charge, but acknowledged he blocked the funds, later released.

Biden said Tuesday, before Pelosi’s announcement, that if Trump doesn’t cooperate with lawmakers’ demands for documents and testimony in its investigations the president “will leave Congress … with no choice but to initiate impeachment.” He said that would be a tragedy of Trump’s “own making.”

The Trump-Ukraine phone call is part of a whistleblower’s complaint, though the administration has blocked Congress from getting other details of the report, citing presidential privilege.

The whistleblower’s complaint was being reviewed for classified material and could go to Congress by Thursday, according to a person familiar with the issue who was not authorized to discuss it publicly and spoke on condition of anonymity.

Trump has sought to implicate Biden and his son in the kind of corruption that has long plagued Ukraine. Hunter Biden served on the board of a Ukrainian gas company at the same time his father was leading the Obama administration’s diplomatic dealings with Kyiv. Though the timing raised concerns among anti-corruption advocates, there has been no evidence of wrongdoing by either the former vice president or his son.

While the possibility of impeachment has hung over Trump for many months, the likelihood of a probe had faded after special counsel Robert Mueller’s Trump-Russia investigation ended without a clear directive for lawmakers.

Since then, the House committees have revisited aspects of the Mueller probe while also launching new inquiries into Trump’s businesses and various administration scandals that all seemed likely to drag on for months.

But details of Trump’s dealings with Ukraine prompted Democrats to quickly shift course. By the time Pelosi addressed the nation Tuesday, about two-thirds of House Democrats had announced moving toward impeachment probes.

The burden will probably now shift to Democrats to make the case to a scandal-weary public. In a highly polarized Congress, an impeachment inquiry could simply showcase how clearly two sides can disagree when shown the same evidence rather than approach consensus.

On Wednesday, the Democratic-controlled House is expected to consider a symbolic but still notable resolution insisting the Trump administration turn over to Congress the whistleblower’s complaint. The Republican-led Senate, in a rare bipartisan moment, unanimously approved a similar resolution Tuesday.

The lawyer for the whistleblower, who is still anonymous, released a statement saying he had asked Trump’s director of national intelligence to turn over the complaint to House committees and asking guidance to permit the whistleblower to meet with lawmakers.

Home sales rise

U.S. new home sales jumped 7.1% in August, as low mortgage rates pull buyers into the housing market.

The Commerce Department said today new homes sales increased to a seasonally adjusted annual rate of 713,000, up from a revised 666,000 in July. So far this year, sales have risen a healthy 6.4%.

Trade tensions and slower economic growth have pushed down interest rates, helping homebuyers for the moment. But new construction has yet to meet the demand from likely buyers, so the sales gains could translate into higher prices.

August’s average sales price rose 6.1% from a year ago to $404,200, a record level not adjusted for inflation.

Much of last month’s sales growth came from homes that have yet to be built, a sign that low mortgage rates are behind the surge in purchases. The 30-year mortgage rate averaged 3.73% last week, down from 4.65% a year ago according to mortgage buyer Freddie Mac.

Home sales climbed in the South and the West, but slipped in the Northeast and the Midwest. The 16.5% monthly sales gain in the more expensive West was reflected by an increase in purchases of homes priced above $400,000 relative to July.

A look back in time

40 Years Ago

September 1979

There have been 37 housing starts in and immediately around Iola in the first seven months of 1979, with a total value of $1.7 million. Most of the new homes are being built in the north and east sides of the city. 

*****

A concrete microwave tower for Southwestern Bell is rising off the ground at the rate of a foot an hour in Gas, using a slip-form method that requires continuous pouring until the job is done. Completion is expected Saturday, when the tower will be 138 feet and eight inches from the ground. 

*****

HUMBOLDT — Voters in District 258 gave solid approval to issuance of general obligation bonds in an amount not to exceed $1,040,302 yesterday for remodeling and new construction at the Humboldt High School. The votes were 453 for and 271 against. 

*****

Paul LaForge Jr., of LaForge and Budd Construction Company of Parsons, and Sergio Campanini, president of Berg Manufacturing Co., signed a contract this morning to build an additional shipping room on the northwest of its present building on U.S. 169 at the north edge of Iola. Campanini said the 160-foot by 42-foot metal structure will be the first phase in a three-phase construction program that will add 57,000 square feet of floor space to the manufacturing complex. 

*****

Carolyn Lucas, an IHS senior, has been named among 15,000 of the nation’s students who qualified as semifinalists in the 1980 Merit Program by the National Merit Scholarship Corp. Semifinalists who advance will be considered for about 4,300 Merit Scholarships to be awarded in the spring of 1980.

Storm douses Puerto Rico

SAN JUAN, Puerto Rico (AP) — Tropical Storm Karen drenched the U.S. Virgin Islands on Tuesday as it bore down on an earthquake-shaken Puerto Rico still scarred by a hurricane two years ago.

Heavy squalls were expected to hit some areas of the U.S. territories overnight as the storm moved slowly over the region and headed to open waters.

Forecasters said the heaviest rains would affect Puerto Rico’s southern and eastern region from 8 p.m. Tuesday to about 2 a.m. on Wednesday.

“The worst is yet to come,” said Elmer Román, secretary of the island’s Department of Public Safety.

U.S. Virgin Islands Gov. Albert Bryan Jr. said late Tuesday evening that Karen had already caused some mudslides in the territory and warned people to remain inside.

“We’re not out of the woods yet,” he said, adding that an island-wide power outage occurred in St. Thomas early in the morning, followed by smaller outages throughout the day.

Schools and government offices remained closed in Puerto Rico as well as in the U.S. and British Virgin Islands, with officials warning people to stay indoors.

Just hours before the storm approached, Puerto Ricans were shaken from their beds late Monday by a magnitude 6.0 earthquake that hit in the Atlantic near the island at a shallow depth of 6 miles (10 kilometers). Three aftershocks, of magnitude 4.7 and 4.6, followed within less than an hour.

No significant damage was reported, said Carlos Acevedo, director of Puerto Rico’s emergency management agency, adding that the concern now was how much rain Karen would drop on the region. The U.S. National Hurricane Center said it could bring 3 inches to 6 inches (8 to 15 centimeters) with isolated amounts of 10 inches (25 centimeters).

Up to 29,000 customers in Puerto Rico were left without power at one point, including those who live in the southeast coastal town of Yabucoa, where 69-year-old retiree Víctor Ortiz huddled inside his home with his wife.

“Every year the storms are stronger and more frequent,” he said, adding that he worried about landslides because he lives in a mountainous region.

The National Guard, which was activated by Puerto Rico Gov. Wanda Vázquez on Monday, carried out a last-minute evacuation of a weeks-old baby from the neighboring island of Vieques, which has been without a hospital since Hurricane Maria hit in 2017. Lt. Col. Paul Dahlen said in a phone interview that the baby was sick and would be taken to a hospital before the storm hits.

Karen regained tropical storm strength Tuesday morning after slipping to a tropical depression. Its maximum sustained winds increased in the afternoon to 45 mph (70 kph), with additional strengthening expected in upcoming days. The storm was centered about 45 miles (75 kilometers) east of San Juan and was moving north at 10 mph (16 kph). Forecasters said it was expected to hit Puerto Rico’s southeast region by late afternoon.

It was expected to keep heading north after passing over Puerto Rico and stay well east of the Bahamas, the Hurricane Center said. A tropical storm warning remained in effect for Puerto Rico, Vieques, Culebra and the U.S. and British Virgin Islands, and forecasters said certain areas could experience stronger winds.

Roberto Garcia, meteorologist in charge of the National Weather Service’s San Juan office, said that some towns in the eastern part of Puerto Rico would likely be hit with moderate to serious flooding, especially those next to mountains.

Gov. Wanda Vázquez urged people in flood-prone areas to seek shelter, with more than 30 people reported in shelters by Tuesday morning.

The island is still recovering from Hurricane Maria, which hit as a Category 4 storm two years ago and is estimated to have caused more than $100 billion in damage. More than 25,000 homes still have blue tarps for roofs and the electric grid remains unstable.

Farther north, Tropical Storm Jerry was moving northward and was projected to pass near Bermuda by Wednesday morning. It was about 250 miles (405 kilometers) west-southwest of Bermuda and had sustained winds of 50 mph (85 kph).

Meanwhile, Tropical Storm Lorenzo formed over the far eastern Atlantic and was projected to become a major hurricane by the end of the week, though while curving out over open sea away from land. It was centered about 465 miles (745 kilometers) west-southwest of the southernmost Cape Verde Islands and had maximum sustained winds of 65 mph (100 kph). It was heading west-northwest at 17 mph (28 kph).

Letter to the editor

Dear editor,

The people of Humboldt might rather see their city streets improved than have a swimming pool. 

In Iola, the water plant, the hospital and the school system might rather have some assistance than a swimming pool.

Bonnie Johnson,

Iola, Kan.