Unit2Sucks said:
We will be lucky to hit 2% GDP growth this year and failed to hit 3% last year.
Further, the feds completely whiffed on their 2018 jobs numbers and recently revised them downward by 0.5 million jobs. That's about 20% of the job growth they previously reported and the largest downward adjustment in history. Funny Trump never seemed to have mentioned it and the conservatives crowing about the economy here failed to address it either.
I tend to agree with Unit 2 on a lot of stuff but I have a different take here. First, overall growth still is good, because that 2% is in real terms as opposed to percentage growth still good and the job market is tight - unemployment rate is near a 50 years low, and keeps getting lower.
Second....the economy seems headed for a fall AT SOME POINT SOON after all the tax cuts and spending because:
1. Trump's trade wars have hurt the global economy (people in countries that buy US goods and services) and will be impacting growth in this country soon.
2. Yield curve discussed enough around here
3. Manufacturing orders are dropping ( I known we are not that much of a manufacturing economy, but it is an important indicator). Why? The economic slow down abroad, and trade tensions
4. Consumer confidence is basically flat compared to a year ago, but it has fallen since late last year. Consumer spending has driven a lot of the late burst in this long expansion cycle, proving Keynsian economics still provide an answer. Cut taxes and spend you will boost the economy (at some point with deficits do we see inflation ?).
5) The housing market has frequently led the economy both into and out of recessions. That has made building permits which are generally issued several weeks before construction begins one of the best historical indicators of economic activity. It is down. I know it's coming, the tax law changes screwed housing, and I don't disagree. But with high employment, seeing housing starts go down is more than just tax law changes.
6) This economic expansion has lated around 10 years and arguably is the longest in the country's history. At some point, another down cycle is due. You can't have markets constantly in turmoil due to things a President says, without negative impact.
