by Robert Carbery
While many watchers of the economy are troubled by the many credit bubbles we have going on right now, the U.S. economy seems to be picking up its pace of growth under the Trump administration. And we’ve only just begun.
Though the stock market riding at record highs means nothing for most Americans, it is nothing to scoff at. Unemployment is at its lowest level in 16 years, though many remain underemployed or out of the work force all together. What is truly telling is the elevated level of business enthusiasm since the start of the new administration.
This business friendly climate installed in DC has resulted in GDP growing at a 3.0 percent pace during the third quarter, this after GDP tallied a 3.1 percent rate in the second quarter, according to the Commerce Department. These numbers are encouraging as they occurred despite the devastating impacts of back-to-back hurricanes causing extensive damage to businesses and assets. We will see what revisions are made.
The rate of growth blew past economist projections of 2.5 percent. This could lead to the Fed increasing interest rates for the third time this year by December. The economy is in its eighth year of recovery since the recession ended in 2009. Though many problems persist, the economic growth is encouraging.
During Trump’s time at the wheel, GDP growth has had its best six month stretch since mid-2014. Though much of the president’s economic agenda is still a work in progress, these early signs show that we could see even better days soon once tax reform gets passed and other job-killing regulation is done away with.
The storms’ impact on the economy actually worked both ways.
“Overall, this is a very solid performance, given the disruption caused by Hurricanes Harvey and Irma,” Ian Shepherdson, founder of the consultancy Pantheon Macroeconomics, said in a research note. He went on to say that the “storms boosted auto sales and spending on food and other storm-related items but depressed housing activity and spending on discretionary services like leisure and entertainment.”
President Trump vowed to return the U.S. to sustainable three percent GDP growth. Economists have called this unrealistic, but the president has come through over the last six months. Can this continue? Or will another shoe drop that takes us back to the anemic growth seen during much of the Obama administration?
There is something going on with real estate and bubbles are forming throughout major U.S. metros. Americans spend far too much money and rely on credit cards, keeping little to nothing in savings. Our federal government is over $20 trillion in debt and nothing is being done to cut that at all. But other than that, we are doing just fine.
Trump’s economic agenda could very well make our economy great again. It might need more time, but the early signs are more than encouraging. With growth becoming a priority of the administration, an economic nationalist agenda could very well take root during Trump’s time in the Oval Office. He needs support from other politicians to help get us going in the right direction. He won’t exactly take a small government, fiscally conservative approach, but he will put America first and will prioritize jobs over everything else.
If GDP growth stays at or above 3 percent, he will be doing something right.
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by Robert Carbery