GDP

Normally, I wouldn’t comment on any single economic release, but today’s GDP revision adds to the mounting evidence of a strengthening US economy. GDP growth in the third quarter was revised up to 5.0%, the fastest annualized pace since 2003 (see graph below).

This was not a case where the headline misled: all of the underlying components (except net exports) were revised higher. Corporate profits as a percentage of GDP reached a record high (see graph below). Following a 2% decline in output in the first quarter of the year, the economy racked up gains of 4.6% and now 5%.

GDP growth will likely slow from here (the economy is tracking around 3% growth in the fourth quarter). The decline in the price of oil is not a harbinger of imminent recession or of impending deflation. The economy is growing a little faster, inflation pressures are not yet evident, monetary conditions remain accommodative. Santa is being generous this year, and we are grateful.

• 20 Dec, 2017

  (Not) Recommended Reading

  I dont like recommended lists. They turn experiences into a contest (and the winner is), and one reviewers preferences ...

• 11 Nov, 2014

  Logistics

  Not enough attention is being paid to the work slowdown/stoppage going on at West Coast ports.The last time there was a ...

• 14 Jan, 2020

  From the Kentucky Coal Mines to the California Sun

  Rupp Arena is one of the iconic venues for college basketball in the country. It is named for Adolph Rupp, the legendary ...