MAGAnomics – Second Quarter GDP Growth 2.1% Beats all Expectations – Inflation Low at 1.5%…

The Bureau of Economic Analysis (BEA) has released the data for the second quarter of 2019.  The Q2 GDP growth rate of 2.1 percent beat all economic expectations, and highlights strong consumer spending throughout the U.S. economy.

The two primary drags on the Q2 release are also the most volatile: Export/Import contributions (-.65%), and Inventory contributions (-.86%) [table 2]. However, consumer spending was much stronger than anticipated (+4.3%) showing the internal strength of the U.S. labor market and the impact of wage growth which still exceeds 3.6 percent.

The inflation index is still low at 1.5 percent year-over-year, and highlights a point all economic pundits overlook.  With countries attempting to stop the impact of tariffs on their exports they are devaluing their currency (EU and China) and subsidizing their export industries (China).  This has the cumulative effect of lowering their price. As a consequence, and with a strong dollar, the U.S. is importing deflation.

The Fed can do nothing of substance to impact low price inflation because the causes are external to the U.S. economy.  CTH predicted this in 2016, and we stand by that assertion today because we now have almost three years of empirical data to prove it.

Wall Street wants bad news because Wall Street wants a lower fed rate.  As a direct consequence Wall Street’s multinational corporate media bias over the GDP data release is hilarious. The headline from NBC is typical: “Economic Growth Slows Less Than Expected in Second Quarter”….    Sometimes you just have to laugh.

When you boil it all down you see the same battle continues: Wall Street -vs- Main Street.

We are in the space of flux where President Trump’s economic policy and trade reset is favoring Main Street blue-collar workers and companies.

Another way to look at it is where the multinationals (Wall St) are Globalists and fighting the economic Nationalists (Main Street).  This really is the heart of the back-n-forth, and there are trillions at stake.

Right now the U.S. middle-class is driving the economy, bigly.  Meanwhile the investment class is trying to keep their old globalist process in place.  Wall Street wants the U.S. to be a “service driven” economy.  President Trump wants the U.S. to be a “balanced production” economy, with an expanding middle-class.

The Wall Street economy generates a wealth disparity; rich and poor with little room in the middle [a limited pie].  A Main Street economy closes the wealth gap by expanding the wealth of the middle-class through higher wages and opportunity [unlimited pie making].

Overall the 3.1% GDP growth in the first quarter and 2.1% GDP growth in the second quarter, puts us on track for typically stronger Q3 to generate a higher than 3.0 percent average.

All of the internals, measurable stats centered around Main Street, are excellent.  It is the externals, measurable stats centered around Wall Street multinational interests, that are weak.  This is exactly what we would expect to see as President Trump focuses on Main Street USA.

It is not a coincidence that the U.S. and Japan are the world’s two strongest economies as the dynamic of Globalists -vs- Nationalists continues.

Don’t forget to take your Winnamins!

Advertisements
This entry was posted in Auto Sector, Big Government, Big Stupid Government, China, Donald Trump, Economy, Election 2020, European Union, Japan, media bias, NAFTA, Nancy Pelosi, President Trump, Trade Deal, Uncategorized, USA, USMCA. Bookmark the permalink.

32 Responses to MAGAnomics – Second Quarter GDP Growth 2.1% Beats all Expectations – Inflation Low at 1.5%…

  1. Matthew LeBlanc says:

    Feels like winning.

    Liked by 7 people

  2. kurt72 says:

    Lumberyards are my customer base and they’re all predicting a great second half of the year. I see it in their purchasing. Winning!

    Liked by 13 people

    • thedustmaker says:

      Yes, same here. Work for a small, high end Incense company and we cannot keep up even though we’ve added a few more people. Making and selling more than at any time in the past. Definitely many with more money to burn out there!

      Liked by 4 people

      • Dennis Leonard says:

        That Incense company ,would not be the one at Pine and Eagle Rd in Meridian,Id,would it?

        Liked by 1 person

      • kurt72 says:

        My firm is looking for 80 new employees in our plants across the country. 👍

        Liked by 4 people

      • Benedict Comey says:

        This is exactly the type of thing I mean when I say I can comfortably splurge a little without taking on debt. Incense? Why not? A little travel? Why not? Local restaurants more frequently? Sure. 401K looks good, no debt to speak of, and employment looks secure. Why not splurge a little… I don’t think I’m an outlier on this one, and that explains the current consumer sentiment.

        Liked by 4 people

    • allhail2 says:

      I agree. My great-grandfather had the foresight as an early FL pioneer family to accumulate roughly 9,000 acres of land in north Central FL. When turpentine was not as hot, he leased to the timber company at the time.

      Today, it’s Weyerhauser. I can attest to your statement by the year over year increase in the annual payment, particularly, over the last two years.

      People with good jobs equals people building/buying houses.

      Liked by 2 people

  3. Marygrace Powers says:

    WINNAMINS = HIGH ENERGY = BEST SUPPLEMENT EVER!

    Liked by 4 people

  4. Wayne Robinson says:

    The filthy hearted sinners do same thing with (faje Data ) error by emphasis added. These liars neither fear God or seek His approval . You do not want to go out bad like the filthy hearted sinners .

    Like

  5. webgirlpdx says:

    I’ve always appreciated the friendship/relationship of the President and PM Abe. They were both very smart that they became close so soon…..and it shows

    Liked by 4 people

  6. cdor1 says:

    See the difference a President can make. Just a few years ago, under Obama, a 2.1% quarterly GDP increase would receive Hallelujahs everywhere. After 21/2 years of President Trump, 2.1% sounds like a slowdown.

    Liked by 9 people

    • Perot Conservative says:

      Yes. I calculated Obama’s last 6 quarters at around 1.5% per quarter average. This was Trump’s lowest Q2 number. Sundance must be anticipating a Q3 over 4%.

      Obama Term Average

      Q3 2015 – 1.0%
      Q4 2015 – 0.4%

      Q1 2016 – 1.5%
      Q2 2016 – 2.3%
      Q3 2016 – 1.9%
      Q4 2016 – 1.8%

      Trump Term

      Q1 2017 – 1.8%
      Q2 2017 – 3.0%
      Q3 2017 – 2.8%
      Q4 2017 – 2.3%

      Q1 2018 – 2.2%
      Q2 2018 – 4.2%
      Q3 2018 – 3.5%
      Q4 2018 – 2.6%

      Q1 2019 – 3.2%
      Q2 2019 – 2.1%

      Obama’s last 6 quarters: 1.483%

      https://www.statista.com/st

      Liked by 7 people

      • L4grasshopper says:

        And Obama’s numbers have to be seen in context: his performance started at the bottom of the recession, which ended in June of 2009. Most of his two terms the economy was in a “recovery”, when GDP is supposed to be better than “normal”.

        Instead, it was worse.

        Trump’s numbers reflect a “normal” economy hovering around the 3% level.

        Liked by 4 people

  7. Perot Conservative says:

    Awesome!

    Atlanta Fed had dropped their estimate from 1.6% to 1.3%! … further possible adjustments will be interesting.

    Other sources have said a small technical recession in manufacturing and housing were factors.

    Pass USMCA!

    Liked by 2 people

    • L4grasshopper says:

      It’s fascinating that the Atlanta Feds GDP estimator was so far off so close to the release of the actual number. They missed it by almost a full % point!

      Liked by 1 person

      • Perot Conservative says:

        Yes! They appear to have become a contra indicator.

        Private businesses anticipate a roughly 3% growth rate last I read.

        1. Pass USMCA
        2. Fed lower interest rate
        3. Hold China to promised ag purchases or ???
        4. Ink Japan deal

        Liked by 3 people

        • L4grasshopper says:

          5. Higher government spending, as just agreed to by Congress and the White House. Government spending is a significant component of GDP [why, I never understood, because it doesn’t reflect private sector economic growth — but there it is!]

          Liked by 2 people

      • JC says:

        AND… Wilbur Ross said delays with Boeing’s 737 airships impact today’s numbers; a .4 increase will be added when the numbers are corrected to reflect this and other factors. ‘Scuse me, but… hehe.

        Liked by 4 people

  8. bosscook says:

    And the idiot Dems keep banging the impeachment drum. LOL

    Liked by 2 people

  9. Dutchman says:

    So, I am going down the highway at 55 m.p.h., (the speed limit), and then I accelerate to 70 m.p.h.
    A cop pulls me over, and I tell him “my car decelerated less than expected!”
    Do I get a ticket?
    Lol,

    Liked by 8 people

  10. I’m at the point now that IF I even bother to read the other guys take on the economic numbers, I wait until I get the truth from SD at CTH.

    Liked by 4 people

  11. Benedict Comey says:

    Is what it is. Thanks to the Trump economy I have no debt to speak of. My 401K is looking good. I have a rainy day fund built up. My employment looks secure for now. Might as well splurge a little as long as it doesn’t involve taking on debt …

    Liked by 2 people

  12. tominellay says:

    …liked the “limited pie” and “unlimited pie making” analogies; easy to understand and to explain to others…thanks…

    Liked by 1 person

  13. GB Bari says:

    “Economic Growth Slows Less Than Expected in Second Quarter”

    Translated: “Economic Growth Rises Faster Than Expected in Second Quarter”

    Dishonest news writers (and lawyers, like Weissmann) always use double negatives to muddle and confuse the truth when they don’t like it.

    Liked by 1 person

  14. GB Bari says:

    PS – Another great article on MAGAnomics by Sundance and one to which I’ve forwarded dseveral links via emails to my friends and family…AND to my financial advisor. She told me that she likes these and AFAIK may already be visiting CTH and reading regularly (gotta remember to ask her.).

    Liked by 2 people

  15. rashomon says:

    As pointed out by posters upthread, all judgements on economic successes are ultimately local. Wall Street comes and goes, but unless your neighborhood is financially stable, all those statistics matter not.

    Liked by 2 people

  16. TreeClimber says:

    I have to admit, the MAGAnomics reports are my favorite articles. Whatever bad news there may be otherwise, the economic news is always good. They give me hope, that no matter how difficult we’re finding life and finances right now, that things can get better, and very possibly will. They give me hope that my husband won’t be stuck in a dead-end job with a s***ty company for much longer, that my sons will grow up not wanting for anything.

    We know a couple out in Denver who just had to leave Louisiana because their rental home became unlivable. They’re once again homeless, trying to scrape up enough for bus passes to get to work – then a car – then somewhere to live. They’re both working at Dollar Tree, they also make jewelry and sell on Facebook and Etsy. Even though we really couldn’t afford it, I just ordered a $5 ring from them the other day. I’m hoping that with the improving economy, they can get better jobs – car – residence – and that their jewelry business will once again become as successful as it was in New Orleans.

    Some of us are still struggling, but not as much as we could be, not as much as we once were. I have hope that we won’t always be struggling.

    Liked by 2 people

    • skipper1961 says:

      TreeClimber,
      How callous of me to “gloss” right by your comment, to serve my own ego. My humblest apologies. You’re right to hold on to hope. Your husband will find something, you’ll see. Heck, just within the last few days I was able to offer to “dial in” 3 fellow workers on my last jobsite. You never know who is around the corner for you.
      God Bless you, and good luck.
      Humbly,
      skipper1961

      Like

  17. skipper1961 says:

    I’m sorry, but I have to thank SD for using this image again. Being on the team that hung that video wall (and the rest of the gear) @ the RNC in Cleveland turned out to be one of my proudest achievements. God Bless you Sundance, for ALL your wisdom, (and Mods, and Treepers).
    (lurking) skipper1961

    Like

  18. One guy I follow from Houston looked at historical data and concluded a consumer spending % of economic activity is better at around 50-55% for our economy… I forget the reasoning.
    Someone else here stated how the new middle class is propping up this economy with CC spending > cash purchases. When wages are up 3.5% and spending is up more than that, he/she would seemingly have a valid argument.
    I want to see the economy grow by A. Creating high-pay entry-level jobs B. Those people consuming conservatively C. Getting married in their early 20s and having kids early too.

    Liked by 2 people

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Google photo

You are commenting using your Google account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s