Saturday, March 02, 2019

This just in

The Bureau of Economic Analysis has finally released the GDP numbers for 2018. The report had been delayed due to the partial government shutdown.

Many headlines were like this one: "U.S. economy grew faster than expected in Q4."

The better "than expected" result for Q4 was 2.6 percent. Well, ok. But here's what I wrote in my previous post, on February 6, before the release:

Trump's big hurrah was 4.1 percent GDP growth in Q2 of last year. That was a one-off result that followed from a confluence of factors that won't be repeated. The growth rate has subsequently declined, and is expected to continue declining significantly going forward. Q3 came in at 3.4 percent. Q4 could be a little under 3 percent. (Apparently the Q4 report has been delayed thanks to Trump's partial government shutdown.) For all of 2018, GDP growth should be approximately 3 percent, which is solid but hardly breathtaking.

The GDP growth for all of 2018 came in at either 2.9 percent or 3.1 percent, depending on which way you do the calculations. I said the rate for the year "should be approximately 3 percent."

 [Update 2019-03-28 - It turns out 2.6 percent fourth quarter growth was indeed too high. The Bureau of Economic Analysis has revised it down to 2.2 percent in their third estimate. GDP growth for the year remains unchanged. The fourth quarter's weakness has apparently continued into Q1 of 2019, which was expected.]

The official headline GDP number for 2018 was 2.9 percent, which exactly equals Obama's best year, 2015. If you use the alternative methodology that gives 3.1 percent for 2018, then 2015's rate becomes 3.8 percent. So Trump either matches, or significantly under-performs, Obama. Your choice. GDP growth for 2017, Trump's first year in office, was 2.2 percent.

In my previous post (you really ought to read it) I quoted Trump from his State of the Union Address: "An economic miracle is taking place in the United States," said the president. The title of my post was "Keeping Trump honest," which is a never ending task.

"In just over two years since the election, we have launched an unprecedented economic boom, a boom that has rarely been seen before," said the president in his speech. "There has been nothing like it," Trump said.

The Q4 numbers, and thus the year's, are subject to further revision.

As I've previously said, with respect to GDP it's all down hill from here. The best year of Trump's presidency is already behind him. GDP growth is expected to be much lower this year than last, and anemic over the coming decade. Some miracle.

Copyright (C) 2019 James Michael Brennan, All Rights Reserved

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