Posted on 03/05/2019 8:26:43 AM PST by SeekAndFind
The economy grew at by 2.9 percent in 2018, the Bureau of Economic Analysis reported Thursday morning in its quarterly report on gross domestic product, tied for the strongest growth in 13 years.
The figure fell just shy of President Trumps stated goal of yearly 3 percent growth.
Still, Thursday's report showed GDP growing at a 2.6 percent annual rate in the fourth quarter of 2018, better than analysts expected for the quarter that included the beginning of the partial government shutdown.
Most economists expect growth to slow in the quarters ahead. Federal Reserve officials, for instance, see GDP growth slowing to around 2.3 percent in 2019, and then slowing even further to 2.0 percent in 2020. The partial government shutdown, in particular, is likely to have lowered first-quarter growth though the Congressional Budget Office believes that the effect will fade in subsequent quarters, and not be reflected in annual growth for 2019.
Trump boosted output last year by increasing spending and cutting taxes. In the years ahead, however, growth is expected to slow as the U.S. population ages.
In one way of looking at the data, though, 2018 economic growth did beat Trump's 3 percent goal. Comparing the fourth quarter of 2018 to the fourth quarter of 2017, the economy grew 3.1 percent. The 2.9 percent figure, in comparison, represents an average of the economy's growth over the course of the year.
Thursday's GDP data will be revised in the quarters ahead, and could ultimately be higher or lower.
After years of raising interest rates in order to get ahead of potential inflation, Fed officials now see the greater risk as setting rates too high, and have signaled that they won't pursue further rate hikes this year.
(Excerpt) Read more at washingtonexaminer.com ...
To be [quietly] revised upwards in 30 days.
Real GDP is 3.1%
See it now “Trump failed to meet goal”.
I hope these Dems have pissed off a majority as much as they have me.
They have done nothing but attack the rightfully elected POTUS and nothing about any other issue
And, how in the world does Government operations impact the GDP such the shutdown ^lowers^ it?
Gross Domestic PRODUCT. What is the government’s PRODUCT?
” growth is expected to slow as the U.S. population ages.”
I hadn’t though of that. Not sure I believe that will be the case. How could it be when so many people have been unemployed for so long and now there’s a strong job market?
Trump is a liar!
Shame ..shame.
Investigate his family and associates.
And his associate’s family.
Impeach him!
Yup, and its probably intentional
We are kicking off the 2020 election season soon so the 2019 numbers are going to be a big issue for the 2020 election fight
Revising numbers up for 2018 combined with a great 2019 would be a good thing
Democrat reaction has been expressed as sadness. Plans are in progress to sponsor candles vigils across the country to morn the passing of the Obama economy.
This is what I don't fully understand. Why is economic growth dependent on more and more government spending (borrowed, by the way)? Wouldn't less wasteful spending by the government be better for the economy? No, if we don't spend money on useless, overpaid bureaucrats, the economy will suffer.
More bad news for democrats means good news for the normal.
The FED will make certain that its monetary policy kills any further increase in GDP growth. The FED is a 100 percent deep state operative - and its members are directed by globalists such as George Soros.
Now just a cotton pickin’ minit here. Let’s be fair. They’re hell bent to pass the Green New Deal, eliminate ICE, and prevent a protective wall from being built. They legalized killing babies in New York State, too.
Fact checkers can now cite another instance where Donald Trump misstated the facts. Never mind that 2.9% is the same thing as 3% for all practical purposes.
Economic growth is not dependent on government spending, but the clown show by the Democrats during the shutdown made companies think twice about expenditures and investment and many of them waited for the shutdown to end. President Trump saw what this was doing, and agreed to “negotiations”.
The Democrats held the economy hostage and did not care about the people. But when have they ever cared?
GDP includes SERVICES as well as a material product. In fact, services make up the bulk of GDP.
Government spending puts money in the hands of its employees and other spending and has the same impact as the spending undertaken to build a house. The debt aspect is irrelevant.
The equation used to express GDP is not an economic truth -- it merely reflects the beliefs of Keynesian economists.
That more government spending creates economic growth is one of those.
But, that growth is financed by debt on future taxpayers. I mean, what would Obama’s growth had been (minuscule as it was) if he hadn’t borrowed an extra trillion dollars every year from future generations? Kind of like saying you got a raise because the bank upped your credit limit.
I think the key concept missed by this is one thats often ignored, opportunity cost. Any time an economic transaction takes place, there are typically a myriad of other transactions that could have happened but did not because of the one that did. For example, if you choose to buy a car, then you might not have money to buy new furniture for your house. The lack of new furniture is the opportunity cost of the new car in this example.
When it comes to government spending, opportunity cost is key. When the government spends money, it does increase GDP. However, we must consider the opportunity cost of that spending. We all know government has no money of its own to spend; it must take any money it spends from the private sector. Thats the opportunity cost government spending increases GDP, but had that spending not occurred, private sector spending would have also increased GDP, and typically would increase GDZp more than government spending does since individuals tend to be better at efficiently investing funds.
In the case of the recent shutdown, government had already taken the money, but was not spending it. Therefore, at least temporarily, GDP was decreased. Of course the left is all too eager to point out this GDP reduction, but completely misunderstands it (probably intentionally). Had the money the government was not spending during the shutdown been refunded to the private sector, GDP would certainly not have declined, and likely would have increased.
very strange. Yesterday, both the NY Times and the Washington Post reported 3.1%
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