The U.S. Gross Domestic Product (GDP) is the value of all goods and services generated within the U.S. economy over a designated period of time. In the second quarter (April, May, June) the GDP grew at a rate of 2.6%. That’s more than double the first quarters 1.2% growth rate.
President Trump set a goal of 3% GDP growth for the first year of his administration. Reaching 2.6% in the second quarter is significant progress toward the attainment of a goal all economists said was unattainable. Those same nay-sayers are also focused on wage rate growth which they claim is not moving with the economy. They are disconnected.
Again, CTH draws attention to the new modern era in economics. Most analysts and punditry have no historic reference points for a new dimension in U.S. economics; where 30 years of fiscal policy to the benefit of Wall Street has how shifted to the benefit of Main Street. We are now in the space between these two economic engines. Traditional economic review no longer applies.
The current growth in GDP is primarily driven by growth in trade. This is the big ‘jump’ between the two quarters. In addition to forcing open markets for U.S. suppliers (see China/Beef and EU/coal), the view of energy as an export commodity is specifically Trumpian MAGAnomics in size, scale and scope.
Until Trump all economic energy conversation ended at the point of “energy independence”. However, with Trumpian MAGAnomics we blow through the goalposts of ‘energy independence’ and begin looking at energy as an export/trade commodity.
Energy export is an entirely new economic sector at the levels proposed by MAGAnomics.
Internally the U.S. is in the building phase for growth in the manufacturing sector. In essence, we have to have the ability to make ‘stuff’, before we can actually make the ‘stuff’. The ‘stuff’ only adds to the GDP after it is made…. THAT’S THE MOMENT when we will see large growth in middle-class U.S. wages.
WASHINGTON (Reuters) – The U.S. economy accelerated in the second quarter as consumers ramped up spending and businesses invested more on equipment, but persistent sluggish wage gains cast a dark shadow over the growth outlook.
Gross domestic product increased at a 2.6 percent annual rate in the April-June period, which included a boost from trade, the Commerce Department said in its advance estimate on Friday. That was more than double the first quarter’s downwardly revised 1.2 percent growth pace.
Wage growth, however, decelerated despite an unemployment rate that averaged 4.4 percent in the second quarter. Inflation also retreated, appearing to weaken the case for the Federal Reserve to raise interest rates again this year.
“Although growth is solid, the lack of wage pressure buys the Fed plenty of time, and works with a very ‘gradual’ tightening cycle,” said Alan Ruskin, global head of G10 FX strategy at Deutsche Bank in New York. “There is more here for the Fed doves than the hawks.” (read more)
Remember, we are entering a budgetary and tax policy phase. The arguments against us will center around economic growth projections and the accompanying projections in tax revenue. The CBO will score policy, legislation and tax proposals based on GDP growth projections.
Those who want to see America fail, both Republicans and Democrats, will under-project the GDP growth possibilities in an effort to block U.S. economic policy. Their motive is to continue support for global economic expansion at the expense of American wealth.
Multinational corporations and multinational banks will continue paying Washington DC politicians to support efforts to keep the U.S. economy down; it is in their best interests to do so. It’s always about the money – There are trillions of dollars at stake.
♦The Modern Third Dimension in American Economics – HERE
♦How Multinationals have Exported U.S. Wealth – HERE
♦The “Fed” Can’t Figure out the New Economics – HERE
♦The FED Begins to Question the Economic Assumptions – HERE
♦Treasury Secretary Mnuchin begins creating a Parallel Banking System – HERE
♦Proof “America-First” has disconnected Main Street from Wall Street – HERE
♦How MAGAnomic Policy is interacting with Wall Street – HERE