The far left may be extolling the virtues of socialism
and government entitlements, but it likely will not produce victory in November. The "blue wave" many had predicted is dismantling before our eyes. The American people are captivated by the bursting U.S. economy. In a time span of 18 months since Donald Trump’s inauguration, the nation is now witnessing 4 percent growth in the second quarter.
During the April-June period, gross domestic product expanded at a 4.3 percent annualized rate, according to the Bloomberg survey median. Their forecast predicted a GNP as high as 5.4 percent.
This is phenomenal news for a country that recently survived one of the worst recessions in decades a decade ago and has seen stagnant growth up until the election of Donald Trump. The stunning recovery has included the biggest tax overhaul since the Reagan era, which increased consumer spending and business investment.
Most economists are cautiously opportunistic about the country’s future growth. The overwhelming numbers will most likely give way to sturdier and less spectacular numbers in the second half of 2018. That will include the Federal Reserve raising interest rates and the hopeful resolution of the tariff situation with the European Union and China in particular.
It is unlikely the second-quarter is America’s new normal, but it is a far cry from the last eight years. One guardedly opportunistic economist is PNC Financial Service’s Gus Faucher in Pittsburgh, Pennsylvania. Although he is impressed by the rapid growth in the economy, he warns, “In the second quarter, we had a lot of components adding to growth.” While the economy is in good shape, "the projected surge is temporary and the result of the fiscal stimulus." He added, “It’s not a 4 percent economy.”
Faucher’s assessment is typical of most economists. It has been decades since this sort of growth has occurred on a protracted scale. One’s own reputation is at stake to risk any flamboyant predictions, which is understandable. But the undisputed truth is America is booming and the future looks bright. The leader of the country is a veteran businessman who has hired thousands of people in his career and met huge payrolls. You might say he is the private sector success story with the experience for critical time in American history.
The GDP growth has averaged 2.2 percent since the recession ended in mid-2009. The new predictions indicate double that number into the distant future. White House economic adviser Larry Kudlow said last week that the economy is starting to grow 4 to 5 percent.
Add to the good news the unemployment picture. It is near the lowest level since 1969. That is defined by steady hiring and low inflation which boosts consumption. This alone makes up approximately 70 percent of GDP. The unemployment figures also include the lowest unemployment rates for Hispanics, African-Americans and women either in decades or since records have been kept.
The stock market is precipitously higher points since Trump took office even with the threat of a tariff war. The U.S. is now the brightest star among developed economies boosting the dollar’s value overseas.
Naturally there are always warning signs in every good report. The trade war could turn ugly and that would mean possible inflation. The rates on benchmark 10-year Treasuries reflect another challenge along with the flattening yield curve.
Wall Street investors have expressed concern whether this economy can handle more interest rate increases. The president was critical of the central bank hiking rates earlier this month. That was unusual for a president to comment, breaking a long White House tradition of remaining publicly neutral. But then, this is no typical U.S. president.
Minimal disruptions are to be expected. Growth remains strong and the 4 percent GNP is almost a certainty. It makes one wonder how the Democrats approaching the midterms will turn lemonade into lemons on such bread and butter issues. Trump may be on the verge of adding more believers to his policies in the Senate and House.
Dwight L. Schwab, Jr. is an award-winning national political and foreign affairs columnist and published author. He has spent over 35 years in the publishing industry. His long-running articles include many years at Examiner.com and currently Newsblaze.com. Dwight is an author of two highly acclaimed books, "Redistribution of Common Sense - Selected Commentaries on the Obama Administration 2009-2014" and "The Game Changer - America's Most Stunning Election in History." He is a native of Portland, Oregon, a journalism graduate from the University of Oregon, and a resident of the SF Bay Area. To read more of his reports — Click Here Now.
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