Here's White House top economist Larry Kudlow last July:
"We are getting 3 [percent GDP growth] and it may be 4 for a quarter or two."
Here's yours truly last July:
"....we expect this week’s Q2 U.S. GDP report to come in at the high-end of expectations, and, thus, there’ll be the attendant “we-told-you-sos” and “see-we-know-what-we’re-doings” coming from White House officials – which, by the way, would be deserved self-pats on the back, given the justifiable optimism spawned over tax cuts and deregulation!
Our warning herein being that while such celebratory (possibly 4%+) growth, were it completely unhindered, would be difficult enough for an advanced economy to sustain over the long run, add in a global trade war and we can say with confidence that, ultimately – should the TW become a protracted affair – we’ll see the GDP number decline precipitously off of whatever Q2 delivers. It’s also fair to say that Q2’s results will reflect a pulling forward of activity, as companies rushed to get business done at the more favorable terms that existed before the unfortunate imposition of tariffs coming and going; a phenomenon that by itself sets us up for a marked letdown in future quarters."
Here are the GDP prints since last July:
Q3 2018: 2.9%
Q4 2018: 1.1%
Q1 2019: 3.1% (while still a long way from 4%, perhaps more pull-forward ahead of then threatened tariffs)
Q2 2019: 2.9%
P.S. We're as capable as anyone of missing a forecast, or misjudging events and circumstances (in fact, we invite it, as we're forever putting our theses to the test), but it'll never be because we took someone else's word for it...
Post a Comment