One important measure of how you are doing financially is the size of your pay check. That’s no different than economists looking at changes in the Gross Domestic Production or GDP.
For the second quarter of this year, GDP grew at a 4.1% rate, which is good — real good, in fact. It was the fastest growth in four years. Bottom Line: the economy is doing great, with no sign of recession on the horizon yet!
But, there are some things to watch carefully. A full point of that 4.1% jump was due to a surge in exports, along with a decrease in imports. This simply cannot continue with a strengthening dollar. (Also, the numbers are skewed slightly by the sudden jump in the export of soy beans to beat that tariff.)
Second, the 4% increase in consumer spending, which is 70% of GDP, cannot continue over the long term with 3% annual salary raises, unless there is some sad growth in credit card debt
From a political perspective, our President has predictably declared a victory and further predicted GDP growth could explode to an astronomical 8-9% — as they say, “from his lips to God’s ears”!
From an economic perspective, Supply-side economists are trying to understand why a deficit stimulus plan of a $1.5 trillion tax cut plus a $700 billion spending increase has not bumped a reliable 2% economy any more. In fairness, any assessment is premature, and we should be patient a while longer, although I am not optimistic.
For the second quarter of this year, GDP grew at a 4.1% rate, which is good — real good, in fact. It was the fastest growth in four years. Bottom Line: the economy is doing great, with no sign of recession on the horizon yet!
But, there are some things to watch carefully. A full point of that 4.1% jump was due to a surge in exports, along with a decrease in imports. This simply cannot continue with a strengthening dollar. (Also, the numbers are skewed slightly by the sudden jump in the export of soy beans to beat that tariff.)
Second, the 4% increase in consumer spending, which is 70% of GDP, cannot continue over the long term with 3% annual salary raises, unless there is some sad growth in credit card debt
From a political perspective, our President has predictably declared a victory and further predicted GDP growth could explode to an astronomical 8-9% — as they say, “from his lips to God’s ears”!
From an economic perspective, Supply-side economists are trying to understand why a deficit stimulus plan of a $1.5 trillion tax cut plus a $700 billion spending increase has not bumped a reliable 2% economy any more. In fairness, any assessment is premature, and we should be patient a while longer, although I am not optimistic.
