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American economy slows, although consumer spending keeps it afloat; US reveals an alleged Venezuelan corruption scheme that exploited the hungry.
Q2 economic growth drops to 2.1 percent
Chip Somodevilla/Getty Images
US economic growth may have starkly fallen to 2.1 percent in the second quarter, but strong consumer spending is keeping the economy afloat. [CNN / Lydia DePillis]
While the growth rate is much lower than last quarter’s 3.1 percent, it’s still higher than what many experts predicted. That’s due to an increase in consumer spending, which drives about 70 percent of the economy. [NPR / Avie Schneider and Chris Arnold]
Slowdown in the economy can mainly be attributed to a steep drop in exports and investment — and trade wars with China and other countries haven’t helped. [Wall Street Journal / Harriet Torry]
Friday’s report is the last opportunity for Fed officials to gauge the temperature of the economy before their policy meetings July 30 and 31. The key topic of interest: cutting interest rates. [Wall Street Journal / Laura Saunders]
Many experts say that an interest rate cut isn’t necessary, although it would give the slowing economy a bolster. It’s still most likely to happen anyway because President Donald Trump has been pressuring the Federal Reserve Board to do so for weeks. [BBC]
There have been some warning signs of a recession, according to economists, but at least the report indicates that we’re in the clear for now. [NYT / Ben Casselman]
A corruption network exploits hungry Venezuelans
Allies of President Nicolás Maduro of Venezuela have been accused of running a corruption network that “exploit[s] Venezuela’s starving population.” [AFP]
The scheme was unveiled by the US government, which sanctioned 10 people — including the stepsons of President Nicolás Maduro of Venezuela and Colombian businessman Alex Saab — as part of their response. [Reuters]
According to the allegations, Saab would bribe officials, including Maduro’s stepsons, to win no-bid, overvalued contracts from the government to import food ration boxes for the starved population. He would then only bring in only a fraction of the food expected, while “reaping substantial profits.” [NYT / Nicholas Casey and Lara Jakes]
The food-aid program, CLAP, was created in 2016 to provide food boxes at subsidized prices after the economic collapse of Venezuela led to a humanitarian crisis where hunger is widespread. [AP / Joshua Goodman and Luis Alonso Lugo]
The program, however, had already been under scrutiny for corruption charges: Officials are accused of embezzling money by overcharging low-cost products and marking up the prices by more than 100 percent before selling to hungry citizens. [Bloomberg / Patricia Laya, Ben Bartenstein and David Voreacos]
The Trump administration will likely seize this moment to try to bring back momentum to their failed campaign to oust Maduro. The US is one of the many countries that does not recognize Maduro’s government due to allegations that his reelection last year was illegitimate. [BBC]
Three Ole Miss students posed in front of the Emmett Till memorial, dotted with bullet holes, with guns in their hands. The new historical marker will be bullet-proof, officials said. [NBC News / David K. Li]
Dreams do come true: College student Harrison Dura has been obsessed with dinosaurs ever since he was a kid, so imagine his excitement when he found a giant skull of a triceratops. [CBS News / Sophie Lewis]
The IRS is taking cryptocurrency seriously. The agency has sent warning letters to those who have failed to report their income and pay taxes on cryptocurrency transactions. [Wall Street Journal / Laura Saunders]
Boram is a 6-year-old YouTuber with 30 million subscribers. She’s well known for her vlogs and toy reviews. She’s also made enough of YouTube to buy an $8 million building in South Korea. [CNN / Julia Hollingsworth and Ji Su Lee]
