President Donald ‘Santa’ Trump Delivering Strong Economic Data
There looks to be no end to the strong data.
- Revised Q-3 GDP, December Philadelphia Fed Manufacturing Index, November Leading Indicators, October Home Prices and Weekly Jobless Claims
- GDP: 3.2% (down 0.1 percentage point)
- Phila. Fed: +3.5 points
- LEI: +0.4%
- Home Prices (Over-Year) +6.6%
- Jobless Claims: +20,000
Another day of numbers, another round of strong data. The 2nd revision to Q-3 GDP showed basically the same growth rate that had been seen in the previous 2 iterations.
The Big Q: Will this strong growth continue?
The Big A: Even without the tax bill, there was every reason to think growth could hold up.
The Philadelphia Fed’s early December reading of Mid-Atlantic manufacturing improved quite solidly.
And notably confidence rose driven by a pick up in new orders. This area does not have a lot of manufacturing, but the index does give us some insight into national trends and it is fair to say the sector is accelerating.
A 2nd sign of strong future growth comes from the Conference Board’s Leading Economic Index, which rose again in November.
The solid increase came on top of a huge, hurricane recovery increase posted in October. It is telling us that growth could accelerate over the next 6 months.
The Federal Housing Finance Agency’s Home Price Index popped in October, mirroring the other home prices measures we have seen. The soft Middle Atlantic region has finally joined in, but the West Coast is where prices are soaring out of sight.
Finally, the labor market is tight.
This year is ending on a high note as we forecast in late January just after President Trump Ingratiation
Growth is strong across the board.
The impacts of the tax bill will be seen before mid-year 2018, as the lower taxes show up in weekly paychecks, not all at once.
Some companies are giving bonuses now temporarily increasing spending power. But raising the minimum wage does add to costs and income growth on a continuing basis.
We do expect more companies announcing that they are raising their minimum wage, then we can conclude that spending will rise more solidly than it has been.
Forecasts of Y 2018 growth are coming in and they range from about 2.5% to 3.5%.
Simply put, next year is shaping up to be a really good, and it may even exceed a 3.1% growth rate.
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