MAGAnomics – Third Quarter GDP Growth of 3% Exceeds “Economist Expectations”…

MAGAnomics is a generally common sense approach toward achieving dynamic growth in the U.S. economy.  Left-leaning economic experts (most of them) are gnashing their teeth as the America-First MAGAnomic principles are paying YUGE initial dividends.

Reuters News is forced to painfully publish the positive numbers; yet they talk down the economy despite the reality.  Again, using the Reuters information we’ll dig into the economic news, and deconstruct their dismissive ideologically-driven narrative.

WASHINGTON (Reuters) – The U.S. economy unexpectedly maintained a brisk pace of growth in the third quarter as an increase in inventory investment and a smaller trade deficit offset a hurricane-related slowdown in consumer spending and a decline in construction.

♦First, “unexpectedly”. Yeah, it’s always ‘unexpected’ when the results run counter to the preferred outcome.  Notice, “inventory investment”, that’s parseltongue verbiage to describe manufacturing and production infrastructure investment.  It’s not just “inventory” as in “unsold products”, what’s happening is companies are investing in growth and building out production capacity.  The “inventory” is actually equipment (being purchased) and operational infrastructure (being built), two measured GDP values.

♦Second, “smaller trade deficit”. Again, as we noted, the reductions in imports have a doubling impact on GDP growth because imports are deducted from GDP in the economic equation.  If you make a $100 widget in America and don’t import a $100 widget from China, the GDP grows by $200 (the combined value of the produced product and the absence of a deduction for the imported product).  Notice no economic publication is giving Trump credit for the “Made in USA”, America First, policy and promotion.

The economy grew at a 3.1 percent pace in the second quarter. It was the first time since 2014 that it experienced growth of 3 percent or more for two quarters in a row. Economists had forecast GDP increasing at a 2.5 percent rate in the third quarter.

[…]  Post-hurricane labor market, retail sales and industrial production data already show an acceleration in underlying economic activity. Economists expect the Federal Reserve will increase interest rates for a third time this year in December.

“Fed officials will be encouraged by both the overall performance and the composition of growth in the third quarter, which confirms the U.S. economic expansion remains on solid ground,” said Michelle Girard, chief U.S. economist at NatWest Markets in Stamford, Connecticut.

Of course the Fed will increase rates.  However, FED policy is still disconnected from “Main Street”.   FED policy is focused on inflation.  We are still in the space between two economies, “Wall Street” and “Main Street”.   FED policy is designed around the Wall Street economic model they created over 20+ years.

Remember, the FED had consigned the “Main Street” economy to be a “service driven economy”; it is Trump’s MAGAnomics that has disrupted this design and is bringing back a production and manufacturing economy, a middle-class economy.  As such FED policy needs both time and new leadership to come into synergy with an entirely different set of economic policy initiatives created by President Trump.

[…] Businesses accumulated inventories at a $35.8 billion pace in the third quarter, leading to inventory investment adding 0.73 percentage point to third-quarter GDP growth. Inventories contributed just over a tenth of a percentage point to output in the prior period. Economists expect a modest boost from inventories in the fourth quarter.

These “inventories” include raw material purchases for future products.  Remember, companies are smart… the free market is smart…. production companies know when to forecast higher import prices on any raw material.  Like you, companies will purchase items now that they predict will increase in price later.  This boosts the gross margin when the final product is assembled for sale.

When final product assembly is timed when the domestic economy is ‘hot’, the final product has a higher selling price.  Lower initial purchase costs for raw materials combined with higher selling prices equals bigger profits.  It’s easy peasy business 101.

Though export growth slowed in the last quarter, that was eclipsed by the steepest pace of decline in imports in three years, leaving a smaller trade deficit, which added four-tenths of a percentage point to GDP growth. Trade has contributed to output for three quarters in a row.

Business investment in equipment rose at an 8.6 percent rate, increasing for a fourth straight quarter.

Import purchases dropping, thanks to Trump policy and promotion of ‘Made in USA’ programs, leads to domestic companies buying equipment to ‘Make in USA’.  DUH…

[…]  Growth in consumer spending, which accounts for more than two-thirds of the U.S. economy, slowed to a 2.4 percent rate as hurricanes Harvey and Irma hurt incomes.

Consumer spending rose at a robust 3.3 percent pace in the second quarter and is likely to accelerate in the fourth quarter with a separate report on Friday showing consumer sentiment holding at lofty levels in October.

“Lofty levels”?  Writers at Reuters can’t even give Trump credit for the highest level of consumer confidence in the past 40 years.

Despite the moderation in consumer spending, inflation perked up in the third quarter, likely as a result of disruptions to the supply chain caused by the hurricanes.

They don’t know what kicked up inflation, because they are stuck in their economic paradigms and not recognizing a tighter labor market… leads to increased wages… leads to increased prices… leads to increased inflation on products from within those labor markets.

This next part cracks me up:

The Fed’s preferred inflation gauge, the personal consumption expenditures (PCE) price index excluding food and energy, increased at a 1.3 percent rate. That followed a 0.9 percent pace of increase in the second quarter.

With inflation rising, income at the disposal of households increased at a 0.6 percent rate, braking sharply from the second-quarter’s strong 3.3 percent pace. (link)

As we have continually stated the FED doesn’t measure ‘highly consumable products’ in their inflation index (ie. food, fuel, energy costs).  These highly consumable products represent the largest part of the expenditures for households.  They are also domestic products.

Trump’s MAGAnomic Main Street (middle-class) policies, as executed with removal of regulation and increases in production etc., are driving down the price of food, fuel, oil and energy – all domestic products.  This lower cost-of-living approach, in conjunction with increased wages as a result of labor market, means a doubling effect on the incomes of middle-class Americans.   Stuff we use a lot costs less and we are simultaneously seeing wage increases.

If it wasn’t for the insufferable ObamaCare, GDP growth would be pushing 4% or higher because we’d have that much more available purchasing power.  However, remaining positive and not getting annoyed by that aspect, this is also why it’s very predictable to see tax reform putting even more spending fuel into your pocket….

All of that will drive GDP well beyond 5%; and when you combine our ability to spend, with U.S. companies making the stuff we want, and again less imports -and you know how imports deduct from GDP growth- well, the totality of it makes 6 or 7% growth seem very plausible….  Which is exactly what Steve Forbes predicted two years ago if Donald Trump became President Trump.

 

 

 

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This entry was posted in Big Government, Big Stupid Government, Donald Trump, Economy, media bias, President Trump, propaganda, Taxes, Trade Deal, Uncategorized, US Treasury, USA. Bookmark the permalink.

99 Responses to MAGAnomics – Third Quarter GDP Growth of 3% Exceeds “Economist Expectations”…

  1. Minnie says:

    💥

    Like a BOSS!

    Thank you, Mr. President, we support you – ALL of us 🇺🇸🦁🇺🇸

    Liked by 22 people

  2. Sentient says:

    Liked by 11 people

    • Lucille says:

      “The Trump economy continues to increase his chances of being re-elected.”

      Which is why the domestic and international Left will do everything they can to destroy the economy even if it means they will be affected also. Under no circumstances should Trump’s efforts be rewarded with re-election. The mindset is demented just as we would expect from those anti-Americans.

      Liked by 3 people

  3. maggiemoowho says:

    WINNING😃👍👍👍 🇺🇸#MAGA🇺🇸

    Liked by 10 people

  4. joninmd22 says:

    Barack Obama as an old movie.

    Liked by 6 people

  5. Atticus says:

    There IS hope!
    And it’s called MAGANOMICS

    Liked by 5 people

  6. Johnny Bravo says:

    Where’s Flep?

    Liked by 4 people

  7. joninmd22 says:

    Technically can they be called experts if they constantly overestimate growth when a democrat is president and underestimate it when a republican is in office?

    Maybe the “experts” should actually learn about economics and not just Marxist claptrap.

    Liked by 14 people

  8. i'm just sayin'.. says:

    Liked by 8 people

  9. FL_GUY says:

    Looking forward to the day when this image shows O about the size of a Troll doll compared to President Trump.

    Liked by 6 people

    • Sayit2016 says:

      OMG I was just thinking Obama should be about 2 inches high in that pic— next economic report he should be reduced to a puddle. The next report after that.. “Clean the chair with like… a cloth”.

      Liked by 5 people

    • thluckyone says:

      WAIT! WAIT! FL_GUY; remember “obama phones”? You’ve given me the idea for “obama gnomes” to put out in the garden and back-yard where your dogs go. LOL! Little Obama Gnomes to put into little garden jails and under rocks and stuff.

      YEAH! Little Obummah Gnomes to put close enough to your recycling-refuse-heap for all KINDS of ca ca to be dumped right on him. The manufactures can cast him with a little place in his hand to hold a magic wand. BWAAAAHAHAHAHAHAHAHAH!!

      THANK YOU, FL_GUY!! MAGA!

      Liked by 4 people

  10. POP says:

    You haven’t seen anything yet, wait until the company tax rate comes down to 15-20%.
    That will suck money off Mars.

    Liked by 13 people

    • Cliff says:

      10 % would match the worlds lowest rate..can’t recall which country.

      Liked by 1 person

      • A2 says:

        Here you go Cliff:
        “Among countries with corporate income taxes, Turkmenistan and Uzbekistan have the lowest top marginal rate at 8 percent and 7.5 percent respectively (Table 2). Nine countries have top rates of 10 percent, most of them small nations in Europe (Bosnia and Herzegovina, Macedonia, Gibraltar, Andorra, Bulgaria). The only major industrialized nation among the bottom 20 countries is Ireland, which is known for its low 12.5 percent rate.” (Only the tax haven islands like Bahamas, Caymans have no corp. tax rates)

        “The United States has the third highest general top marginal corporate income tax rate in the world, at 38.92 percent. Due to the recent reduction in Chad’s corporate tax rate, the U.S. rate is exceeded only by the United Arab Emirates and Puerto Rico.”

        The worldwide average corporate tax rate has declined since 2003 from 30 percent to 22.5 percent”. (Except for the USA. Gee I wonder who was President in the last ten years?)

        Read more:
        https://taxfoundation.org/corporate-income-tax-rates-around-world-2016/

        Liked by 1 person

      • WSB says:

        Ireland is threatening going to 8.

        Like

    • JC says:

      Ha – that’s one way of putting it, POP. I like it.

      Like

  11. Baba Prabudh says:

    Goose-flesh! TOTAL BOSS!

    – @StocksnScotch

    Liked by 2 people

  12. emet says:

    But…not everyone is doing well: “Hello? 911? THIS is the NFL, we are bleeding money, send the first responders!”

    Liked by 6 people

  13. Budman says:

    That picture of the little munchkin sitting next to our GREAT PRESIDENT cracks me up! The only thing big about the munchkin was his ego and NOTHING ELSE!
    Thanks Sundance for all of your hard work and setting the record straight about these foolish……. eh emm, economists?

    Liked by 6 people

  14. NJF says:

    FBN is doing the happy dance. Did a montage of POTUS campaigning & saying “you will get so tired of winning….” along with Barry’s dismal growth numbers. Lol

    #Winning

    Liked by 7 people

  15. Pam says:

    I love that huge image of POTUS next to the teeny tiny image of Barry. It never gets old. LOL!

    The UNIparty is seeing what they feared the most which is POTUS being successful. MAGA!

    Liked by 5 people

  16. amwick says:

    Woot woot!

    Liked by 2 people

  17. Just so you all know. I follow all the “letter” news and this was mostly expected.
    This was all part of the Obama 8.5 year plan he enacted when he took office.
    The GDP is going up because Obama put in place a plan that would eventually make Hillary look good.
    But all CNN and MSNBC economists agree as do all the other important economists that this 8.5 year plan Obama put in place, is whats working and Trump should not get credit for it.

    It’s almost a sin how incredibly stupid these people are and firmly believe we are.
    They can flip-flop with the best of them.
    In the first quarter they slammed Trump. In the second the praised Obama. Now in the 3rd they are glorifying Obama.
    This is like building the wall. Most deny that there are prototypes built and that it’s going to happen.

    But back to the GDP. When it goes up again they will be looking to rename the White House at this rate of mass confusion.

    Liked by 1 person

  18. NJF says:

    Lol

    Liked by 6 people

  19. fleporeblog says:

    Our President has done everything SD has described all on his own! There is no one in Congress or in D.C. That can take any credit for where our Economy is currently at right now! People thought our President was nuts when he predicted a 3 percent GDP for 2017!

    He would have done it! The ONLY reason he will come up short is the fact that the previous Moron was still in office for the first 20 days of the 1st Quarter. Our President used the 2 months and ten days of the 1st Quarter to implement his policies. Regulations were being slashed and our Energy sector was beginning to be unleashed. The final GDP for the 1st Quarter came in as a MISERABLE 1.2 percent.

    The 4th Quarter will absolutely be 3 percent. It would not shock me if it is much closer to 4 percent.

    When tallying the final GDP for 2017, you add all 4 Quarters together. 1.2 + 3.1 + 3.0 + 4.0 equals 2.8 for 2017!

    There is a good chance that the 3rd Quarter is adjusted upwards. Keep in mind the original GDP for the 1st Quarter was 0.8 percent before it was readjusted to 1.2 percent. The 2nd Quarter started at 2.8 percent before it was adjusted to 3.1 percent. Nothing stopping the 3rd Quarter being adjusted to 3.3 percent.

    If that occurs at we hit 4 percent for the 4th Quarter, the 2017 GDP for the year will be 2.9 percent!!!!!!!

    We ca all thank Barry for not having 3 percent for 2017!!!!!

    Liked by 8 people

  20. litlbit2 says:

    Thank you President Trump and do not forget the increase in SSI for seniors. Maybe not great but a increase none the less! MAGA

    Liked by 3 people

  21. indiamaria2020 says:

    It seems to me……..

    If a really smart guy wanted to change the course of our Nation, from socialism back to free-market capitalism in a setting of entrenched Globalist infrastructure complete with bought Politicians……He would start with getting the 94 MILLION able-bodied jobs, getting their wages increased, and lowering their taxes. To the average working folk, this is the ONLY way to distinguish him from the usual parade of lying, career politicians. Get tangible results that impress the average, taxpaying hayseed, get them on YOUR side, and then, and ONLY then make our traitorous tormentors pay for their treason. Doing the reverse will merely be an exercise in ideological emoting.

    (Psst! By the way, the MONSTROUS disasters in the 3rd quarter are estimated to have cost the GDP 0.8 percent. Imagine that…..)

    Liked by 8 people

  22. shadowcole says:

    This is my favorite presidential photo of all time. The lion and the weiny.

    Liked by 3 people

  23. mcfyre2012 says:

    But … but … Liberals keep telling me that Trump inherited the strong economy from Obama…and Obama should be the one getting credit for the economy doing so well now!

    Liked by 3 people

  24. Could we possibly see a renaissance for Supply Side economics? How long before the Keynesians wake up, if at all? If so, we will need quite a few more academics capable of explaining Say’s Law without the baggage of Keynesian theory polluting the discussion.

    Liked by 2 people

    • Alligator Gar says:

      An Aggie supply-spider taught me micro and macro in the ’80s at uni. The guy was brilliant and had Milton Friedman on the required reading list.

      Like

  25. Zach says:

    You seem to be suggesting that a wealthy, successful businessman actually knows how to grow the economy, as opposed to a Marxist ideologue community organizer who never produced a dollar of real value over the course of his life.

    Well, that was all sarcasm. Some people actually believe in the Soviet/Cuban/Venezuelan model. Shoot, Obama even improved on the old 5-year plan concept by 70%.

    Liked by 1 person

  26. Southpaw says:

    Pass the tax relief and Christmas season will be a blowout

    Liked by 3 people

  27. Ditch Mitch says:

    More winning! Looks like another RINO Senator is biting the dust. It is reported Hatch will not be running again. Looks like Mitt wants to take Hatch’s place he is still a RINO, but maybe a better RINO. We can only hope.

    MAGA!

    Liked by 2 people

    • sickconservative says:

      Why, just part of the establishment to me.

      Like

    • Maquis says:

      He is on record in Utah newspapets as hoping to be the leader of the Republican Party, in opposition to the Deplorable President Trump.

      I will fight that SOB if he runs. We are blessed to know we are seeing the end of McStain, only to have another pompous sanctimonious fool join the fray? Why do these idiots I fought to elect, in vain, keep making me hate them? Why?!

      Like

  28. I am praying that this all comes to upstate NY soon.

    Liked by 1 person

  29. I must stay I am stunned by the 3% number after 3 massive hurricanes. Our economy truly is resilient. Flep was right and I was wrong. No storms and we would clear the 3% easily this year.

    Liked by 3 people

  30. Oldschool says:

    Is it my imagination or is Trump getting larger each time Sundance posts this pic?

    Liked by 2 people

    • Minnie says:

      Indeed!!

      President Trump’s stature grows, daily, based on mega MAGA accomplishments 👍

      The diminishment of a turd happens, quite naturally.

      “It” will soon disintegrate.

      Like

  31. tony5460 says:

    I hate to spoil the party. I think it’s a bit premature to celebrate. Under Obama, both in 2013 and 2014 have two consecutive quarters gdp growth higher than 3%. Yet, 2013 and 2014 gdp growth rate are less than 3%. So I won’t be surprised if the full year gdp growth rate is less than 3%.

    Like

  32. Maquis says:

    God Bless the Magnificent United States President Donald Trump!!

    Like

  33. Maquis says:

    MAGAAAAAAAA!!!!!!!!!!

    😁

    Like

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