Faster government spending, especially for defense, reportedly accounted for nearly half of acceleration in economic growth since mid-2017.
The U.S. economy has expanded at a 2.9% annual rate since April of 2017, according to the Commerce Department’s tabulations of the nation’s gross domestic product, or output, The Wall Street Journal explained. “That growth rate is faster than the 2.2% annual growth rate between mid-2009—when the expansion started—and April 2017,” WSJ.com concluded.
Faster government spending accounted for nearly half of the acceleration, according to a Journal analysis of Commerce Department data.
The Commerce Department will provide its first estimate of third-quarter growth Friday morning, with new numbers on which sectors are contributing most.
“Economic growth is an important point of debate in the midterm elections. President Trump and Republicans say tax cuts and less regulation have accelerated growth. Democrats say faster growth is uneven and unsustainable. The role of government spending has gotten less attention from either side,” the Journal explained.
Meanwhile, White House economic adviser Larry Kudlow says that Wall Street is plunging because of fear Democrats will win midterms and end President Donald Trump’s “pro-growth policies.”
Kudlow, speaking to reporters outside the White House on Tuesday, blamed the market decline on mid-term elections, CNBC.com reported.
U.S. stocks slumped broadly in early trading Tuesday, sending the Dow Jones Industrial Average down more than 500 points and extending the market’s recent string of losses.
However, many experts contend the latest wave of selling came as investors grew increasingly unsettled by the prospects for China’s economy and the cost of Trump’s aggressive trade policies.
However, Kudlow, who served as the Trump campaign's senior economic adviser, sees a much more polticial angle to the selloff.
"I think the stock market is worried that Congress will change and will overturn these pro-growth policies," the veteran financial guru and former Ronald Reagan adviser said.
The "correction has to overcome the uncertainty about this election," said Kudlow, who worked as Reagan’s budget deputy between 1981 and 1985.
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