GDP Release: 4th Quarter Growth 2.6%, 2018 Annualized 2.9%, 2018 Yearly Real GDP 3.1%…

The Bureau of Economic Analysis, BEA, finally released the fourth quarter growth rate estimate for 2018.  The 4th quarter growth result at 2.6% exceeded expectations, and shows the U.S. economy is growing stronger than almost all economic forecasts.

WASHINGTON DC – In the fourth-quarter, U.S. gross domestic product grew at an annualized rate of 2.6%, according to the latest data from the Bureau of Economic Analysis.

Thursday’s report beat expectations, with consensus economists polled by Bloomberg looking for growth to slow to 2.2% during the final three months of the year. The domestic economy grew at a pace of 3.4% in the third quarter and 4.2% in the second quarter.

Despite the softening in GDP in the fourth quarter, overall growth in 2018 was solid. Real GDP grew at a pace of 3.1% in 2018, measured from the fourth quarter of 2017 to the final quarter of 2018. This represented a stronger pace of annual growth than the 3% targeted by the Trump administration. (read more)

The professional political class and corporate financial media are once again trying to talk down the strength of the U.S. economy.  However, the Main Street economy is powering through despite their efforts.

There is a visible connection between the Wall Street multinationals and the financial media; both are riddled with anxiety over Trump’s economic policies that favor Main Street over Wall Street and it shows in the media coverage.  I digress.

“Consumer spending continued to grow solidly and, most encouragingly, business investment growth recovered sharply after a dip in the third quarter. Despite big external headwinds and financial market volatility in the fourth quarter, U.S. firms are not retrenching sharply on capex. Labor market strength and ongoing fiscal stimulus should see domestic demand expanding by enough to keep GDP growth above potential in 2019, despite a rising drag from net trade.”

Brian Coulton, Fitch Ratings.

“Business investment was a big positive surprise, with nonresidential spending soaring 6.2% on the back of a 6.7% jump in equipment spending and a honking 13.1% increase in intellectual property products.”

Sal Guatieri, BMO Capital Markets.

The rate of import goods, a deduction from GDP, slowed down between the third and fourth quarter and consumer spending was higher than anticipated.  That’s good news, but that’s not the whole story….. for Main Street it gets even better.

The current inflation rate (PCE index) was once again measured at 1.6%.  However incomes are rising faster than inflation.  This leads to more “disposable income”:

Disposable personal income increased $218.7 billion, or 5.7 percent, in the fourth quarter, compared with an increase of $160.9 billion, or 4.2 percent, in the third quarter. (TABLE 8)

(pdf – BEA source)

BEA: During 2018 (measured from the fourth quarter of 2017 to the fourth quarter of 2018), real GDP increased 3.1 percent, compared with an increase of 2.5 percent during 2017.

The Full Picture: Business investment into Main Street USA continues to increase.  Manufacturing jobs and durable good employment in Main Street continues to increase.  Wages continue to rise.  Inflation on most consumer goods remains low.  Disposable income is growing, which means more consumer spending.  More consumer spending means higher rates of economic growth and an expanding economy.

MAGAnomics is working.

This entry was posted in Auto Sector, Big Government, Donald Trump, Economy, Legislation, media bias, President Trump, Trade Deal, Uncategorized, US dept of agriculture, US Treasury, USA. Bookmark the permalink.

49 Responses to GDP Release: 4th Quarter Growth 2.6%, 2018 Annualized 2.9%, 2018 Yearly Real GDP 3.1%…

  1. WSB says:

    Well…….DANG!!!!!!!

    Liked by 1 person

    • Too Real says:

      Just sayin…………………With a sprawling purview representing nine Western states, the appellate court has long been a thorn in the side of the Trump White House, with rulings against his travel ban policy and limits on funding to “sanctuary cities.” A lawsuit is currently pending before the 9th Circuit concerning Trump’s emergency declaration over border security — and Trump had sarcastically predicted that Democrats would purposefully file suit in the San Francisco-based appellate court to improve their odds.

      The new 9th Circuit judge, Seattle attorney Eric Miller, was confirmed 53-46. Miller was one of the 51 federal judicial nominees left over from the previous Congress whom the White House re-nominated last month.

      Miller, currently the appellate chairman of the high-powered law firm Perkins Coie, will replace Judge Richard Tallman, a Bill Clinton appointee who assumed senior status March 2018. Miller is the fifth former clerk to Associate Justice Clarence Thomas to be nominated by Trump to a federal appellate court, including embattled D.C. Circuit Court of Appeals nominee Neomi Rao.

      Liked by 2 people

    • Guy Bee says:

      But, but, but – globalism is so much better for America. Di you ever stop to think that globalism is really the modern word for Communism? It flattens out the economies in all countries – shift work to the lower paid, destroys the middle class, and gives the rich and powerful mor power. Gee – wonder if AOC will be come a billionaire with her wiley ways.

      Liked by 2 people

    • necsumadeoinformis says:

      Hmmm, is this bigger news than cherry-picked Cohen sound bites in service of a fake narrative? Let… me… think… /s

      Liked by 2 people

    • skipper1961 says:

      WSB,
      Besides the wonderful news about our GDP growth, every time I see that image of Mr. Donald John Trump standing “under” the video “wall” on that stage (RNC @ Cleveland), I feel an enormous amount of pride, having been one of the members of the “Rig Squad”, that hung that BEAST!! Just to be a speck of plankton waste at the bottom of that ocean was one of the most uplifting jobs I do (Trust me, with 30 years of experience, I’m one of the “juniors” of the crew. A true All-Star Team. ) Never gets old……………CAN’T WAIT to hang it again!!!!!!
      Be well, God Bless,
      skipper1961
      P.S. “like” button broken, so ^^^^^^^^^^^^^^^^^!

      Liked by 1 person

  2. L4grasshopper says:

    Real GDP grew at a pace of 3.1% in 2018….
    ====
    This whole “was it 2.9 or 3.1” thing makes my head spin.

    What I want to know is this: using the method that resulted in 3.1%, did a calendar year ever hit or exceed 3% under Obama?

    I would say “no”, because it has oft been stated how Obama is the first President to never have a single year of 3% or better GDP, and surely if using this method showed a 3% year, it would have been trotted out 😎

    So I think I’m safe to declare that Obama REMAINS the only President to never have a 3% GDP year!

    Liked by 4 people

    • snarkybeach says:

      Obama cultists claim that in one quarter, his economy made 3.0%. IMHO that was done through zero interest rates and smoke & mirrors, not real data.

      Liked by 2 people

    • Perot Conservative says:

      I am with you!!

      Is this 2.9% figure liberal games??

      So they don’t have to acknowledge a HUGE positive achievement??!! I never recall 2 separate figures before.

      Like

      • PVCDroid says:

        I think it is. I watched the December GDP report come in an many pundits were surprised how low it was. You bet there is corruption all through the gov that can make this happen just so Trump couldn’t claim the 3%. They are insane.

        Like

  3. StanH says:

    And this is what matters folks.

    Liked by 1 person

  4. Ziiggii says:

    Liked by 5 people

  5. modspell says:

    We better start 45’s impeachment NIOW…before it hits 4%.

    Liked by 3 people

    • necsumadeoinformis says:

      You better believe that the partisan goal is to keep good things from happening for the population as a whole that the other side might get credit for from voters. That’s a super-top priority. Prime directive.

      Liked by 1 person

      • Sentient says:

        The deceleration should mean interest rate hikes are off the table, and we could even see rate cuts – which could spur home purchases, refinances and boost consumer spending as we move into 2020.

        Like

  6. ristvan says:

    This is mainly tax reform and regulatory relief, plus steel and aluminum antidumping tariffs and China tariffs.
    USMCA is not yet in effect, and China trade deal is not yet set. Those will kick in before 2020 election. Hard to see PDJT losing; the question is how long will his coattails be? Nice to get House back plus 60 in Senate.

    Liked by 3 people

    • TheLastDemocrat says:

      Once NAFTA was signed, it took 4 years for the bottom to drop out of manufacturing jobs – going from 17 million to 11 million in a year or two. It is only now up to about 13 million.

      With the end of NAFTA, and likely changes to China trade policies, it will take a while for those benefits to show up in the economy.

      We are on course for things to be steady and get better.

      Liked by 1 person

  7. Blase Bauer says:

    When will we see the deficit
    decrease?

    Like

    • Dennis Leonard says:

      When you stop depending on government for everything and elect people who will pass a real budget.

      Liked by 2 people

    • Dennis Leonard says:

      When you stop depending on government for everything,And elect people who will pass a real budget.

      Like

    • Doppler says:

      There’s been no serious attention paid to it since I’ve been concerned about it, when it hit $1T in 1980. David Stockman tried to balance the budget for Reagan, but failed. Dick Cheney understood this to mean: Reagan proved that deficits don’t matter, so it continued to grow in Bush 43. I believe they were near $4B at the start of the GWB administration, when the dotcom bubble burst, we went to war in the Middle East, and the housing bubble was in process of bursting when he turned it over to Obama. Obama of course, sought accountability for no one, went along with corporate and banking bailouts that insured the short sellers who anticipated the collapse (including George Soros) got every penny of their leveraged bets paid off, damn the small mortgage holders who lost their homes, and everyone else. The cooperative Fed printed money, bought their own debt, and Obama claimed credit for avoiding a Great Depression. Enormous deficits flew by without so much as a nod, and now President Trump with the strongest economy ever seems not interested in addressing it either.

      It’s like teenagers crowding onto a condemned bridge, assuming it won’t break because it hasn’t before, and isn’t it fun to cram more and more on . . . until it collapses. Or anyone else who ends up paying 18% on out of control credit card debt.

      And the leveraged short-sellers at global hedge funds will make their biggest killing ever, when the world loses faith in the US dollar. Soros made his first billion and earned fame as the man who broke the Bank of England. Times a million when those hyenas turn on the US Treasury.

      Like

  8. Dennis Leonard says:

    With all your writing,please tell us why this never occurred under obi,when he was running up the national debt,now go blow smoke up someone else’ s you know what.

    Like

    • john edward lorenz says:

      It never occurred under obama because it wasn’t designed to.

      Like

    • Mr.G says:

      SeekerofTruth looks like one of hundreds of articles I’ve seen on Zero Hedge over the years. The thing is, the authors NEVER have an alternate plan or a course. EXCEPT hounding people into buying gold.

      Like

  9. john edward lorenz says:

    Try to get through to the demsheviks lemmings and sheeple that they demsheviks had nothing to do with this.

    Like

  10. STEVE P says:

    “So the dreams of 3%-plus economic growth in 2018 were fulfilled, after tax cuts and ballooning federal deficit spending, which acted as a huge stimulus:”

    What this fails to observe is it is the right kind of stimulus – putting the money back with the people where it can be invested in assets, buildings and real growth. Because the government wastes billions in trains to nowhere and endless investigations in no way stimulates anything.

    Liked by 1 person

  11. L4grasshopper says:

    The sad but real truth is that neither party in DC wants to cut spending.

    Spending too much is the cause of all this debt. Over 3/4s of all spending is either mandatory or on autopilot. Only about 1/4 of yearly spending is subjected to the annual appropriations process.

    There is no political advantage in cutting spending. Or even holding it level.

    None.

    Like

  12. woohoowee says:

    GDP surprise chalked up to unexpected consumer spending during shutdown, R&D growth
    https://on.mktw.net/2TgXj0M

    See, Americans aren’t stupid. While the Boobs on the tube were shrieking the sky was falling due to the shutdown, we didn’t take their bait and just kept right on spending 😂 Who’s Sorry Now 😂

    Like

  13. Big Jake says:

    Most also forget the revision to GDP calculations during a first term summer under Obama’s first term. It boosted his GDP by about 0.5% by including services, something not used in previous calculations.

    Like

  14. Merkin Muffy says:

    Why is the liberal media saying 2018 growth was 2.9%? 2.2+4.2+3.4+2.6 is 12.4. Divide that by 4 and you get 3.1.
    https://www.cnbc.com/2019/02/28/trumps-economic-policies-failed-to-deliver-promised-3percent-growth-in-2018.html

    Liked by 1 person

    • GB Bari says:

      I think the calculation involves multiplication not addition. We are talking about growth calculated quarter over quarter each time.

      The math to calculate this is – –

      1.022 x 1.042 x 1.034 x 1.026 = 1.129761 or 12.98% for the year

      Take the 4th root of 1.29761 to calculate the average GDP growth per qtr.
      The 4th root of 1.29761 = 1.03097 (or 3.1% average growth per qtr.)

      Doublecheck this answer: 1.03097 x 1.03097 x 1.03097 x 1.03097 = 1.129761

      Like

  15. redrockhunter says:

    where is fle? been awhile since i have seen any post by fle. miss the economic analysis.

    Like

  16. Here’s what counts:
    • Debt-to-GDP Ratio
    • Fed Interest Rate hikes that drive up Interest-on-Debt

    Like

  17. Ghost says:

    Observations from a smaller branch.

    This week the national association of realtors released pending home sales.These are home sales that are under contract. They were projected to come in at 0.7%. However, they came in + 4.6%. The highest M/M increase since March 2017: 5.5%. This is January numbers !!!! December year over year was down 2.3% but I’m thinking the bottom is in place.

    I’m in full agreement with Sundance that the real estate market will vary from region to region and state to state. Therefore projecting a national real estate market is going to be near impossible. That being said I expect really goods things in many areas this coming year.

    Why you ask?

    Mortgage Delinquency rates are at 2.83% and first time under 3% in more than 10 years. If you remove the largest 100 banks and focus on community banks in the U.S. mortgage delinquency rates are down to 1.16% the lowest in more than 20 years.

    This bodes well for main street.

    /Smile!!

    Liked by 1 person

  18. tonyE says:

    According to Occasional Cortex the Government can mandate a 5% GNP product by printing money.

    I mean, it’s paper, right?

    Like

  19. SW Richmond says:

    US GDP = $19 Trillion
    US Deficit = $900 Billion = 4.7% of GDP

    Without deficit spending, the economy is revealed to be shrinking. SHRINKING.

    Like

  20. Fools Gold says:

    It’s called a Trump economic magic wand! 😎

    Like

  21. 6x47 says:

    Worth remembering- this growth occurred even with 4 interest rate increases

    Like

  22. Looking at the BEA data detail lines is quite illuminating:
    1) Despite new tax bill, current personal taxes paid are flat to slight growth (predictable from anyone that understands consumer economic behavior)
    2) Personal Income from 2016 to 2018 grew 9%!!! (Q4’17 to Q4’18–4.5%) This is astonishing and a real break from the last 20 years
    3) Relief for retirees and those on fixed income–Interest income up 12% from 2016 to 2018 (3.8% Q4’17 to Q4’18); Dividend income up 14% 2016 to 2018 (6.4% Q4’17 to Q4’18)
    4) Transfer payments grew, but proportion of total personal income flat at 16.9 to 17%.

    This is epic and changing improvement.

    And even better news, and what I think gets Kudlow and Hassett so excited, is that business investment increases lay the groundwork for continued economic growth.

    Debt is an issue–and most of this results from entitlements (that are far less generous than the stupidities in various Dem proposals and the GND). POTUS charged his team to budget with 5% decrease built in for F2020–and this plus ideas to streamline various gov’t departments will make a big dent. But heck, we have a Congress that spends all its time in time-wasting hearings like Cohen testimony, Climate Change hearings where no-one shows up, and other inanities. To address debt and entitlement will require a much more serious Congress. I don’t see that happening until after 2020 and only if we retake House and continue to clip the power of the RINO/Uniparty.

    No wonder POTUS uses the song’–“You can’t always get what you want…”

    Like

  23. Frbrdskmi8 says:

    Thank you Mr. President. God bless you and yours.

    Like

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