Economists throw cold water on Trump's boast about economic growth

"On Friday, the newest data from the Department of Commerce found that the U.S. economy topped 3.2 percent annualized growth in the first quarter of 2019 — a rate well beyond what experts were expecting."
"President Donald Trump took a victory lap, trumpeting his skill as an economic steward to CNN reporters before an NRA event in Indianapolis. “I’m not allowed to comment,” on GDP for 10 to 15 minutes, he said, but “we’re knocking it out of the park.”

"But several economists pointed out that the report conceals some bad news — it turns out that a huge amount of that growth came from one-off events that boosted trade and inventory. Underneath the total number, growth in consumer spending and business investment was much smaller — meaning that the long-term outlook is weaker."

Read More: https://www.rawstory.com/2019/04/economists-throw-cold-water-trumps-boast-economic-growth/?utm_source=push_notifications

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2 replies	Author	Time	Post
Economists throw cold water on Trump's boast about economic growth (Original post)	Vidal	Apr 2019	OP
MarketWatch kicking in some info....	Roland99	Apr 2019	#1
Why do people who aren't participating in 3.2 GDP even care what the GDP is?	ooky	Apr 2019	#2

Response to Vidal (Original post)

Fri Apr 26, 2019, 10:22 AM

Roland99 (52,781 posts)

1. MarketWatch kicking in some info....

GDP ‘stomped’ estimates, but some factors appear unsustainable, economists say
https://www.marketwatch.com/story/gdp-stomped-estimates-but-some-factors-appear-unsustainable-economists-say-2019-04-26?mod=mw_theo_homepage

“GDP stomped estimates, coming in at 3.2%, but the first quarter report was marked by unusual data that inflated it temporarily — mainly short-term boosts from higher inventories and from trade (which added one percentage point alone). If you factor out those one-offs, you get GDP rising at just 1.3%, as measured by ‘final sales to private domestic purchasers.’” — Robert Frick, Navy Federal Credit Union.

...

• “On the price side, both the GDP deflator and core PCE price index were a little below expectations, still indicating that despite solid growth there is little in the way of inflationary pressure. However, even with that these strong growth numbers certainly don’t justify current market pricing for a possible cut by the Fed, and as such today’s release should be positive for the US$ and negative for fixed income.” — Andrew Grantham, CIBC Economics.

• “Not as good as it looks. While the headline figure was stronger than expected, “strength” was due to faster inventories (an unsustainable pace) and net exports (a narrower trade deficit as trade policy shifted imports ahead).” — Scott Brown, Raymond James & Associates.

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Response to Vidal (Original post)

Fri Apr 26, 2019, 10:47 AM

ooky (7,408 posts)

2. Why do people who aren't participating in 3.2 GDP even care what the GDP is?

If nothing has changed in YOUR life, i.e., you still stuggle to get from paycheck to paycheck, still can't afford your prescriptions or afford to go to the doctor, still pay close to the same amount of tax, still have a stagnate income because real wages still aren't growing, why would you give a flip what the fucking GDP is?

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