{"id":45695,"date":"2019-04-28T09:22:12","date_gmt":"2019-04-28T14:22:12","guid":{"rendered":"https:\/\/olduvai.ca\/?p=45695"},"modified":"2019-04-28T09:22:16","modified_gmt":"2019-04-28T14:22:16","slug":"gdp-fake-news","status":"publish","type":"post","link":"https:\/\/olduvai.ca\/?p=45695","title":{"rendered":"GDP: Fake News"},"content":{"rendered":"\n<figure class=\"wp-block-image\"><img decoding=\"async\" src=\"https:\/\/dweaay7e22a7h.cloudfront.net\/wp-content_3\/uploads\/2019\/04\/shutterstock_319181492-650x360.jpg\" alt=\"GDP: Fake News\"\/><\/figure>\n\n\n\n<h3 class=\"wp-block-heading\"><a href=\"https:\/\/dailyreckoning.com\/gdp-fake-news\/\">GDP: Fake News<\/a><\/h3>\n\n\n\n<p class=\"wp-block-paragraph\">The first-quarter GDP number was released this morning. And at 3.2%, it came in far above estimates. Consensus was about 2.3%. It was also the highest Q1 GDP print since 2015.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">But there\u2019s probably less here than meets the eye.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">About half the GDP gain came from a surge in inventories and a sharp reduction in the trade deficit, neither of which is sustainable. They are likely one-time boosts.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">The economy has been growing since June 2009, making this the second-longest economic expansion on record. However, it has also been the weakest economic expansion on record. That has not changed under President Trump.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Even during Obama\u2019s weak expansion we saw strong quarters including the first quarter of 2015, which was 3.2%, and the second quarter of 2015, which was almost 3%. The problem is that these strong quarters soon faded; growth in the fourth quarter of 2015 was only 0.5%, almost recession level.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Under Trump, second-quarter 2018 growth was a very impressive 4.2% annualized. Third-quarter 2018 growth was 3.4%. Trump\u2019s tax cuts seemed to be producing exactly the kind of 3\u20134% sustained trend growth Trump had promised.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">But then the economy put on the brakes and growth slowed to only 2.2% in the fourth quarter. It looked like the 2018 \u201cTrump bump\u201d in growth was over and growth was returning to the 2.2% trend that had prevailed during the Obama administration.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">And despite the first quarter\u2019s 3.2% outlier, I expect lower GDP in the quarters ahead, returning to the same punk levels we\u2019ve seen for nine years.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">For the year, economists believe GDP will expand 2.4%, down from last year\u2019s 2.9% gain, as the boost from the 2017 tax cuts and increased government spending over the past two years start to fade.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">What about the possibility of recession?<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Most investors are familiar with the conventional definition of an economic recession. It\u2019s defined as two consecutive quarters of declining GDP combined with rising unemployment and a few other technical factors.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">&nbsp;\u2026click on the above link to read the rest of the article\u2026<\/p>\n","protected":false},"excerpt":{"rendered":"<p>GDP: Fake News The first-quarter GDP number was released this morning. And at 3.2%, it came in far above estimates. Consensus was about 2.3%. It was also the highest Q1 GDP print since 2015. But there\u2019s probably less here than meets the eye. About half the GDP gain came from a surge in inventories and [&hellip;]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_monsterinsights_skip_tracking":false,"_monsterinsights_sitenote_active":false,"_monsterinsights_sitenote_note":"","_monsterinsights_sitenote_category":0,"footnotes":""},"categories":[2],"tags":[11023,2779,391,13343,806,827],"class_list":["post-45695","post","type-post","status-publish","format-standard","hentry","category-economics","tag-daily-reckoning","tag-fake-news","tag-growth","tag-inventories","tag-trade-deficit","tag-united-states"],"_links":{"self":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/45695","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=45695"}],"version-history":[{"count":1,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/45695\/revisions"}],"predecessor-version":[{"id":45696,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/45695\/revisions\/45696"}],"wp:attachment":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=45695"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=45695"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=45695"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}