Friday’s GDP report was remarkable for any number of reasons. We saw the best 1st quarter growth rate in 4 years (3.2%), we're now trailing a 12 month growth of +3.3% and the average economic growth under the Trump administration of 2.9%, compared to 1.8% for the Obama administration, best since the Clinton administration and the advent of the internet.
The best part is, it’s sustainable. According to ADP, the average person is now making 3.8% more than a year ago and still increasing through the end of March. With 70% of the US economy coming from consumer spending, there's plenty of room for this kind of growth to continue. I want to walk you back to a couple of points I emphasized earlier this year when the financial markets were a mess and the news cycle included non-stop coverage about the negativity of the partial government shutdown and Trump tax policy the upcoming tax season.
In my piece from January 8th, I mentioned "During my vacay, I did a deep dive into over 100 companies I track to see if there really was something fundamentally different in the economy that I’d missed or if this was simply an investor-driven selloff. During my research, there were no companies that had deteriorating fundamentals during the month. Six of the companies actually had improving fundamentals, while the rest were performing just as well as they had been generally. In other words, nothing wrong with the economy. (During the selling) I was becoming more optimistic in the face of the correction and selling – not the opposite".
On my piece from January 14th regarding the partial government shutdown and the role of the federal government in our lives after, I illustrated the exact impact, negligible (0.3%), of the partial government shutdown on our economy. I said, "There’s a dearth of education about the role of government in this country. There’s also a dearth of analytical thought. I’m in a position to provide you with both and this shutdown is a teachable moment to illustrate these points in a way I wouldn’t be able to otherwise. I’ll also never stray from my core values and principals, which include a belief in limited government – because it’s the popular thing to do. There’s no shortage of media, virtually everywhere else that’ll tell you what you want to hear without facts and analytical thought. The reason I’m here is because I’ll tell you the truth and provide perspective, you’ll never get anywhere else".
There are two sides to stories and one side to facts.
Photo by: Jim Lo Scalzo - Pool/Getty Images