MAGAnomics – Second Quarter GDP Growth 2.1% Beats all Expectations – Inflation Low at 1.5%…

Posted on July 26, 2019 by sundance

The Bureau of Economic Analysis (BEA) has released the data for the second quarter of 2019. The Q2 GDP growth rate of 2.1 percent beat all economic expectations, and highlights strong consumer spending throughout the U.S. economy.

The two primary drags on the Q2 release are also the most volatile: Export/Import contributions (-.65%), and Inventory contributions (-.86%) [table 2]. However, consumer spending was much stronger than anticipated (+4.3%) showing the internal strength of the U.S. labor market and the impact of wage growth which still exceeds 3.6 percent.

The inflation index is still low at 1.5 percent year-over-year, and highlights a point all economic pundits overlook. With countries attempting to stop the impact of tariffs on their exports they are devaluing their currency (EU and China) and subsidizing their export industries (China). This has the cumulative effect of lowering their price. As a consequence, and with a strong dollar, the U.S. is importing deflation.

The Fed can do nothing of substance to impact low price inflation because the causes are external to the U.S. economy. CTH predicted this in 2016, and we stand by that assertion today because we now have almost three years of empirical data to prove it.

Wall Street wants bad news because Wall Street wants a lower fed rate. As a direct consequence Wall Street’s multinational corporate media bias over the GDP data release is hilarious. The headline from NBC is typical: “Economic Growth Slows Less Than Expected in Second Quarter”…. Sometimes you just have to laugh.

When you boil it all down you see the same battle continues: Wall Street -vs- Main Street.

We are in the space of flux where President Trump’s economic policy and trade reset is favoring Main Street blue-collar workers and companies.

Another way to look at it is where the multinationals (Wall St) are Globalists and fighting the economic Nationalists (Main Street). This really is the heart of the back-n-forth, and there are trillions at stake.

Right now the U.S. middle-class is driving the economy, bigly. Meanwhile the investment class is trying to keep their old globalist process in place. Wall Street wants the U.S. to be a “service driven” economy. President Trump wants the U.S. to be a “balanced production” economy, with an expanding middle-class.

The Wall Street economy generates a wealth disparity; rich and poor with little room in the middle [a limited pie]. A Main Street economy closes the wealth gap by expanding the wealth of the middle-class through higher wages and opportunity [unlimited pie making].

Overall the 3.1% GDP growth in the first quarter and 2.1% GDP growth in the second quarter, puts us on track for typically stronger Q3 to generate a higher than 3.0 percent average.

All of the internals, measurable stats centered around Main Street, are excellent. It is the externals, measurable stats centered around Wall Street multinational interests, that are weak. This is exactly what we would expect to see as President Trump focuses on Main Street USA.

READ MORE:

https://theconservativetreehouse.com/2019/07/26/maganomics-second-quarter-gdp-growth-2-1-beats-all-expectations-inflation-low-at-1-5/