I never said I was an economist. However, are you saying you don't think wage growth, oil prices, manufacturing growth, the semi's B2B etc are unimportant?
Hi tejek, yes all those indicators are important. However, I had asked what is the PRIMARY indicator of U.S. growth? Anyway, the answer is GDP, which recently has been growing at 4.4%. That is a very healthy figure and is the highest since the peak of the bubble years. The equation for aggregate demand is as follows:
AD = Business spending + consumer spending + gov't spending - taxes
Yes, but that doesn't insure the economy is healthy. We can have a strong GDP for months, even years, before there is serious fall because some of the economy's underpinnings were weak all during that time.
That's the major problem with indicators.........they can be arranged in such a way as to be very misleading.
So by all economists' standards, this economy is in goldilocks mode. Only bitter Democrats will say that the economy is not doing well. The only main two main thorns in the side of this economy is high oil and deficits. Bush is already throttling back the deficits. But I worry that he is a cause of the oil problems and not the solution. If we're right about that, then oil will not come down until we have another President. Let's hope our economy can hold out against that huge tax until he leaves office.
Like everything else, calls on the state of the economy have become partisan. The economists who are calling this a goldilocks economy are Bush supporters. I don't pay attention to them nor to economists who are anti Bush. I try to stick with the facts. And the facts suggest that conditions are not as good as the term, goldilocks economy, would suggest.
ted |
