Real GDP Up 2.8%, Inflation down to 2.9% in Latest Report

Lol... and this seems a bit better, until it's reduced due to errors.

 

Funny, I'm not seeing that at the grocer or gas station.

 

Awesome, I hope the continued good news leads to a fed rates cut. Consumer spending, inventory investment and business investment are all encouraging signs for the overall economy.

The fact that GDP growth is < inflation (by a tiny amount) means inflation will still be a focus, which it needs to be. But it won’t be so much of a focus that businesses and consumer’s costs stay too high to borrow for growth.

The markets reacted accordingly today.

 

The Trump bump is real... Thanks.

 

Obama is doing work!

 

it's Jill, get it right

in all seriousness, this is the soft landing that everyone claimed was impossible. fed managed it well..has little to nothing to do with potus

 

why do you think our monetary policy is too tight?

 

limiting new company development that is more dependent on risk on investment more likely in lower interest rate environments..jmo

 

that's a good pt. I own a lot of Russell 2000 index & it jumps a lot everytime it looks like rates may go down. On the other hand, with UE soooo low, it is not a great time from growth.

 

I don’t think it is too tight based on the inflation we were seeing. Now that inflation starts with a 2 they can loosen it which will allow for more business investment which is what will matter most in 5 / 10 / 15 years. Unemployment is also at acceptable levels. I’m not criticizing the fed for their prior actions at all. If you can borrow to build a factory at 3% versus 8%, it simply matters in my opinion.

 

FYI. I am pretty sure the GDP is inflation adjusted. Says so at least.

 

I think 3% is too low. 1. it hurts savers. 2. It inflates assets/leads to people having to turn to risker assets for a return. 3. It does not give the FED much to fight econ downturns.

5% is the 50-70 avg.

 

All very fair. I’ve worked in private equity my entire career, so I’ll be the first to admit lower rates drastically help me personally / professionally.

Point #1 and #2 would offset if savers are saving via 401k’s versus actually saving via money in the bank or bonds. 5% as a risk free rate means businesses are closer to 8% (or much higher in my business).

#3 is extremely valid. It takes away the fed’s biggest tool if things go south. So if you want to take my first post that everything is going pretty well with rates where they are, it is hard to disagree with your counter without getting into hypotheticals of what investments aren’t being pursued.

 

Yeah, real GDP growth doesn’t give GDP “credit” for the increase of inflation. Nominal GDP growth was above 5%, but that is because things got more expensive. After adjusting for inflation, inflation still is .1% greater than GDP growth which means the two are for all practical purposes increasing at the same rate.

 

Neither am I. Guess we need 4 more years of this direction before we get back to the old normal.

 

Let’s hope so cuz the alternative is the job and wealth destroying policies of the republicans.