| | | Don Surber
Spinning a 4.3% jump in economy
Like Fred Flintstone, the media is saying yabut, yabut boo-hoo-hoo
The American economy grew at an annual rate of 4.3% this summer amid tariffs and the deportation of illegal aliens. Growth was 3.8% in the spring.
The inflation rate dropped to 2.7%.
Wages are up 4.1%.
All of these were better than expected by the experts because the experts are partisan hacks beholden to the deep state, which opposes making America great again.
And Ed Morrissey reminded readers, “Just to clarify: real GDP already accounts for inflation. This is growth above the rate of inflation, annualized for comparative purposes. The last six months of economic activity has shown a combined growth of 4.0% or a bit better, which is a fantastic momentum by anyone’s reckoning.”
Trump’s Billionaire Cabinet Members are the difference. They know wat they are doing because they each made a fortune doing this in business.
Commerce Secretary Howard Lutnick said, “Just think, the United Kingdom grew 0.1%, the European Union grew 0.4%, and Japan fell 0.6%. Donald Trump’s economy grew 4.3%!”
This wasn’t supposed to be this way.
On August 7, Diane Swonk, Chief Economist, KPMG told PBS:
Well, what’s really important is that tariffs tend to be—historically, they’re a one and done, a bump-up and a one time increase in price levels.
But this doubling of tariffs, basically doubling from what we saw in June, the effective tariff rate, that is not only going to add to another increase in prices, which we’re only beginning to see the early signs of right now, but also the tariffs are so large that they also squeeze profit margins and that means cost-cutting or layoffs.
And so what we’re worried about is a sort of stagflationary kind of nature of these tariffs because they’re so large and they’re just unable to be completely absorbed by either firms themselves or completely passed on to consumers 100 percent.
We’re looking for inflation to pick up to about 3.5 percent by year-end and then stay elevated a little bit longer than we initially expected because of the sequential nature of these tariffs and the fact that we have had inflation running above the Fed’s target for the better part of more than four years.
Inflation ran above the Fed’s target under Biden. Under Trump, inflation runs below wage increases.
She also said, “Well, we still have a 40 percent chance of recession. And we aren’t forecasting a full recession yet.”
In April, JP Morgan said we had a 60 percent chance of a recession. That’s just a reminder that economists have predicted 10 of the last 3 recessions.
Upgrade to paid
Media outlets are spinning when they should be eating crow.
CNN headlined its report, “The US economy expanded at the fastest pace in two years as wealthier Americans kept spending.”
The story said, “An acceleration in consumer spending, up 3.5% from 2.5% in the second quarter, and exports, up 8.8% from -1.8% in the second quarter, were the main contributors to the third-quarter GDP reading.”
The Wall Street Journal said, “GDP reflects the total of all domestic spending plus exports. But since some domestic spending is on imported products, rather than things made in the U.S., imports are subtracted from total spending to arrive at GDP estimates. When imports go down, as they did in the third quarter, that results in an addition to GDP.”
As well it should. An 8.8% rise in exports and a 4.7% decrease in imports are the result of tariffs—you know, the thing that was supposed to lead to a recession.
The paper also said, “Businesses have been uncertain about how much in tariff costs to pass along to consumers, making it difficult to gauge the full impact of Trump’s tariff policies on prices.”
This comes after assuring us that tariffs are just a tax that importers pass on down to consumers.
WSJ also said:
The data show the economy growing at an average annual rate of 2.5% since Trump returned to office, even after a first-quarter contraction as companies ramped up imports to get ahead of new tariffs. The growth is on par with the 2.4% average pace recorded in 2024, during the Biden presidency.
A measure that tracks demand from businesses and consumers—but not more volatile government, inventory and international trade data—ticked up slightly in the third quarter. That suggests underlying demand from businesses and consumers remained solid.
The pace of business investment cooled to 2.8% from 7.3% in the prior quarter.
4.3% annualized growth? We’re still doomed, right?
Credit where due goes to CNBC, which played it straight and noted, “Elsewhere in the report, corporate profits soared by $166.1 billion, or 4.2%, compared with a gain of $6.8 billion in the second quarter.”
That’s $166 billion more taxable income. Times 21%, that should be $33 billion more money to balance the budget.
Jeff Bezos is an expert on making money but his Washington Post last reported profitability in 2021. It lost $100 million last year on revenue likely around $300 million.
The newspaper looked for the cloud in the silver lining. The Post said:
Despite the strong growth and recent expansion, many economists are forecasting tepid, if any, growth in the current fourth quarter, largely because of the spending and investment hit from the 43-day government shutdown that began Oct. 1.
By the way, the shutdown DID torpedo the Republican Congress as Democrats lead it by 3 points in the Rasmussen polls.
The Post flogged the tariffs:
Tariff-related swings in purchasing habits and trade have weighed heavily on this year’s data, leading to a negative reading in the first three months of the year, followed an unusually high growth rate the next quarter. In the third quarter, growth was boosted by a flurry of car purchases, as Americans bought ahead to avoid the Trump administration’s promised tariffs, but economists say that bump has already passed.
The Post didn’t let facts get in the way of its narrative. In WaPo Land, the bump in car sales isn’t because more people can afford new cars, no, no, no.
And then there is this:
“This report that was supposed to come out in October is very old news,” said Chris Rupkey, chief economist at FwdBonds, a financial markets research company.
If it is old news, then was is the newspaper reporting it?
Because it is not old news. It’s terrific. |
|
