Jul 27, 2018

Between the lines: Trump's 4% growth

Data: Bureau of Economic Analysis; Chart: Chris Canipe/Axios

President Trump got his triumphant 4% economic growth moment today, and he threw together a surprise speech to celebrate on the White House's south lawn.

The big picture: This is the best quarterly growth since 2014. Trump claims we're on track for 3% this year, and previously promised rates that are even higher (and rather unlikely). Former president Barack Obama enjoyed four quarters of 4%, but his highest year topped out at 2.9%.

The good from the report:

  • Americans are saving more than we thought: "The data show the average savings rate at [7%] between 2013 and 2017, up from the previous figure of [5%]." — FT's Kadhim Shubber
  • Consumer spending is up: "Larger paychecks, pushed up in part by tax cuts and the tightening labor market that’s forcing employers to offer heftier pay, are encouraging spending." — WSJ

And the not-so-good:

  • "One-time factors": Several areas of major growth in the report were in soybeans, with farmers rushing to sell before tariffs, and oil and gas investment, which is dependent on unstable prices. — AP's Christopher Rugaber
  • Rising borrowing costs because of Federal Reserve's interest rate hikes.

Reality checks... MarketWatch's Steve Goldstein rated multiple Trump claims today. Three of note:

  1. True, if the economy doesn't stumble in Q4: “We are now on track to hit an average annual GDP of over 3%..."
  2. Possibly, but not a lock: “We are on track to hit the highest annual average growth rate in over 13 years.”
  3. Unlikely: “I will say this right now, and I will say this strongly, as the trade deals come in one by one, we’re going to go a lot higher than these numbers."

The bottom line: "The economy’s annualized growth of 4.1% in the second quarter is unlikely to be repeated soon," the WSJ's Greg Ip notes.

  • "Yet the underlying details are still impressive, pointing to an economic expansion that has picked up vigor and still has plenty of room to run."

Go deeper: Why stocks went down when the GDP went up

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Milwaukee Mayor Tom Barrett in 2012. Photo: John Gress/Corbis via Getty Images

Six people died in a shooting at the Molson Coors Brewing Company in Milwaukee on Wednesday, including the gunman, Mayor Tom Barrett told reporters at a Wednesday evening press conference with local police.

Details: All of the victims worked at the brewery complex, as did the shooter who died of "an apparent self-inflicted gunshot wound," police confirmed in a statement late Wednesday.

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33 people in California have tested positive for the coronavirus, and health officials are monitoring 8,400 people who have recently returned from "points of concern," Gov. Gavin Newsom said Thursday.

The big picture: COVID-19 has killed more than 2,850 people and infected over 83,000 others in some 50 countries and territories. The novel coronavirus is now affecting every continent but Antarctica, and the WHO said Wednesday the number of new cases reported outside China has exceeded those inside the country for the first time.

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Syria's darkest chapter

Family room without a family, in Idlib. Photo: Muhammed Said/Anadolu Agency via Getty Images

The worst humanitarian crisis of Syria’s brutal civil war is colliding today with what could be the war’s most dangerous geopolitical showdown, after at least 29 Turkish troops were killed in an airstrike.

The big picture: The fighting is taking place in Idlib in northwest Syria, where a ferocious Syrian and Russian offensive has displaced 1 million civilians and infuriated Turkey, which borders the region.

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