Monday, White House economic adviser Larry Kudlow says the US economy is enjoying a “strong prosperity boom.”
“We are in a strong prosperity boom and every data point shows that. And when we go into the distribution of those economic benefits it is precisely the bottom half, in some cases the lowest 10%, that have actually done the very best in this economy,” he said in a TV interview Monday.
“I grow weary as I read these articles, at some of our critics … some of whom appear to be running for higher office, and they are painting a picture of an economy deep into recession,” said Mr. Kudlow, who worked as President Reagan’s budget deputy between Y’s 1981 and 1985.
The US economy is on a 3% growth path for Y 2019 and “profits will outperform the usual doom and gloom,” he predicted.
An accumulation in inventories contributed to a 3.1% annualized increase in GDP in Q-1. Inventories are expected to have subtracted from GDP growth in Q-2.
The Atlanta Federal Reserve is forecasting the economy grew at a 1.4% rate in Q-2.
The government will publish its advance Q-2 GDP growth estimate later this month.
Meanwhile, government officials, in their efforts to calculate US GDP gross are falling further behind in measuring rapidly evolving technology.
Mismeasurement understates the annual pace of inflation-adjusted GDP growth by around 1 percentage point, compared with 0.5 point in Y 2005 and 0.3 pt in Y 1995, according to a report this week by Goldman Sachs economist Spencer Hill.
He based the assessment on GDP tallies across 4 categories: Unmeasured nominal output, free and crowd-sourced digital products, consumer inflation, and business investment in information and communication technology.
“This is somewhat larger than our previous estimates and would imply that roughly half of the post-crisis productivity slowdown is explained by greater mismeasurement,” Mr. Hill wrote in the report. He also cautioned that the uncertainty around the estimates is large, particularly with respect to digital goods and healthcare consumer inflation.
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