The Experts Were Wrong: First Quarter Growth Hits 3.1 Percent

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Posted: Jun 03, 2019 1:30 PM
The Experts Were Wrong: First Quarter Growth Hits 3.1 Percent

Source: AP Photo/Manuel Balce Ceneta

President Trump’s economic agenda has performed better than projected again. First quarter growth hit a solid three percent, staving off fears of a recession and once again showing the U.S. economy is still going strong. There have been ongoing fears that the Trump administration’s escalating trade war with China could send us off the rails. The stock market has been volatile. The White House recently announced a $15 billion program to help farmers impacted by the tariff conversations and threats. The administration is playing the short-term pain for long-term game strategy, which isn’t all that popular with past Republican on this policy; many would see this as a pork program. Yet, after three presidencies of failing to tackle China on trade, what have we got to lose? China has noticed that this is a White House that has teeth and one that’s coming after them on multiple fronts. They respect that as well, viewing him as a master tactician. This issue will linger. For now, the economy is growing and talk of a recession should be put to rest (via CNBC):

The U.S. economy grew by 3.1% to start the year, slightly better than expected and providing some relief at a time when recession fears are accelerating, the Commerce Department reported Thursday.

First-quarter gross domestic product beat the 3% Dow Jones estimate but was lower than the initial 3.2% projection from the Bureau of Economic Analysis. The decrease came due to downward revisions to nonresidential fixed and private inventory investment, two key drivers to GDP.

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Exports rose 4.8% amid the increasingly bitter trade war between the U.S. and China, while imports, which are a subtraction from GDP, declined 2.5%. The level of net exports contributed nearly 1 percentage point to the GDP gain.

In the bigger picture, growth easily surpassed what most economists had been expecting at the start of the year. At one point, the Atlanta Federal Reserve was estimating GDP to rise just 0.2%. Strong contributions from real gross domestic income helped drive the better numbers, as did a rise in exports, state and local government spending and nonresidential fixed investment.

Three words: Keep. America. Great.