GDP Grows at Stronger-Than-Forecast 3% Rate in Third Quarter

[BigBrandonAllenFan]

http://www.marketwatch.com/story/economy-grows-at-3-rate-in-third-quarter-despite-negative-impact-from-hurricanes-2017-10-27

Trumponomics can't be denied as a good thing.  Other Presidents have seen good growth years, but not in their first year in office as we have witnessed with President Trump.  That is a good sign for the future.  I had read some articles from some optimistic forecasters in late 2016 that stated by the end of President's Trump's first term the NASDAQ will double in value.  They may be right.  They will be right if this pace continues.

GDP grows at stronger-than-forecast 3% rate in third quarter
By Greg Robb
Published: Oct 27, 2017 9:30 a.m. ET

The numbers: The U.S. grew at a solid 3% annual pace in third quarter despite damage from two hurricanes, according to Commerce Department data. That's above economist expectations of a 2.7% growth rate, according to a MarketWatch survey, and only slightly below the 3.1% growth rate in the second quarter.

The last time the economy had two consecutive quarters of above-3% growth was in 2014. The government said it couldn't say exactly how much hurricanes Harvey and Irma sliced from growth in the July-September quarter. Because Puerto Rico is not a state, hurricane Maria does not factor in the government's GDP calculations.

What happened: The economy was powered by solid consumer spending, healthy business and government outlays and a boost from more volatile sectors like inventory and trade. Consumer spending, the main engine of the economy, rose at a 2.4% rate after a 3.3% gain in the second quarter.

Nonresidential, or business, investment rose 3.9%. Inventories added 0.73 percentage points to growth and the trade sector added 0.41 percentage points. Excluding those volatile categories, final sales for domestic product rose 2.3% in the third quarter, down from a 2.9% rate in the prior period. Government spending was also up after the hurricane. Housing investment slumped for the second straight quarter.

Core inflation as measured by the PCE price index increased at a 1.3% annual rate, up from 0.9% in the second quarter.

Big picture: The solid rise in third-quarter growth despite the hurricanes shows things are looking up for the economy. Over the past few years, a 3% growth rate in a one quarter would typically be followed by a 1% rate in the next three-month period. Economists think growth may be over 3% in the fourth quarter due to rebuilding from the storms. The strong economic growth will bolster arguments of Federal Reserve officials who want the central bank to raise interest rates again in December.

What they are saying?: The 3% growth rate "will be welcomed by the White House and demonstrates that the hurricanes ended up having little lasting impact on the economy," said Paul Ashworth, chief U.S. economist at Capital Economics.

"If the point of looking at Q3 data is to confirm whether the Fed is on track for a series of quarterly 25bp increases in policy rates, consider the point was made," added Steven Blitz, chief U.S. economist at TS Lombard.

[Vantage 8 dude]

Not denying the somewhat stronger GDP growth in the quarter. A couple of things to keep in mind: First of all, the significant bump in vehicle sales was in great part due to replacement of vehicles destroyed during the various hurricanes. Doubtless some of that increase will be given back in coming quarters. Secondly, the Fed will very likely use this as "cover" to go ahead and raise rates again likely in December. Some real debate being generated as to whether or not further tightening is truly necessary at this point. While the Fed may still be paranoid about a pick up in inflation, many argue that the economy isn't necessarily as strong as some in Washington would have us believe; inflation isn't quite as high as some would argue either. 

[BigBrandonAllenFan]

Not denying the somewhat stronger GDP growth in the quarter. A couple of things to keep in mind: First of all, the significant bump in vehicle sales was in great part due to replacement of vehicles destroyed during the various hurricanes. Doubtless some of that increase will be given back in coming quarters. Secondly, the Fed will very likely use this as "cover" to go ahead and raise rates again likely in December. Some real debate being generated as to whether or not further tightening is truly necessary at this point. While the Fed may still be paranoid about a pick up in inflation, many argue that the economy isn't necessarily as strong as some in Washington would have us believe; inflation isn't quite as high as some would argue either.

What appears to me, V-8, as I have looked at many, and most every mutual fund chart, the mutuals are going up on a steady, even keel.  I take strongly into consideration that we are now at like a 25 year record for number of days running that there has not been a 3% dip.  To me, that speaks as the strongest of indicators.  I am over 90% invested now, and have less fear than I ever have had about being that deep into the markets. 

I bought heavy in the Class K funds after they all took a 3 day, ten to fifteen percent drop back in mid August, and they have rebounded to gain 75% of that loss in two months.  It has made my year.

I was just looking for a buy or two when I stumbled upon the across the board Class K plunge.  It was the only mutuals I could find that were not topped out, and I bought them up just one week after they fell. 

It was an easy read, I think you will agree when you see the chart on this particular Class K fund, FFDKX>

https://www.google.com/search?q=ffdkx&rlz=1C1SFXN_enUS534US534&oq=FFdkx&aqs=chrome.0.69i59j0j69i60l2.2221j0j8&sourceid=chrome&ie=UTF-8

[Vantage 8 dude]

What appears to me, V-8, as I have looked at many, and most every mutual fund chart, the mutuals are going up on a steady, even keel.  I take strongly into consideration that we are now at like a 25 year record for number of days running that there has not been a 3% dip.  To me, that speaks as the strongest of indicators.  I am over 90% invested now, and have less fear than I ever have had about being that deep into the markets. 

I bought heavy in the Class K funds after they all took a 3 day, ten to fifteen percent drop back in mid August, and they have rebounded to gain 75% of that loss in two months.  It has made my year.

I was just looking for a buy or two when I stumbled upon the across the board Class K plunge.  It was the only mutuals I could find that were not topped out, and I bought them up just one week after they fell. 

It was an easy read, I think you will agree when you see the chart on this particular Class K fund, FFDKX>

https://www.google.com/search?q=ffdkx&rlz=1C1SFXN_enUS534US534&oq=FFdkx&aqs=chrome.0.69i59j0j69i60l2.2221j0j8&sourceid=chrome&ie=UTF-8

Oh don't misunderstand me. I'm not complaining at all about the market's run (and who would unless one's "short the market"). Having said that, of course one never really knows if, and when, a "black swan" event might come out of no where. An event such as major overseas default-don't fall asleep on the HUGE debt problems in both Europe (especially govt debt) and/or massive private debt in China. My guess would be that if either were to happen it would be more likely the former; China has far too many ways to cover/mask the true extent of potential failures. Obviously another event that could really throw a curve into things would be an actual outbreak of a shooting war somewhere like Korea or some other geopolitical crisis we don't necessarily foresee. And while it's not talked about all that much, the slow but steady rise in  rates the Fed seems bound and determined to accomplish will eventually start to wring out some of the liquidity that has helped fuel some of this market run.

Not trying to play "Chicken Little" and say the "end is near". Personally I think we likely still have some move on the upside. However, I've been around far too long, and seen far too much to believe we can just fall asleep just because we haven't hard a major correction in a while. Keep in mind the markets care less about what we think or believe rather than cold, hard facts. And every time I think I've gotten a handle on the markets they've had a way of teaching me renewed humility.   Let's enjoy it while we can, however, keeping a wary eye open for possible trouble as well.

BTW an interesting observation I think could apply here: "The market can remain irrational longer than you can remain solvent". -John Maynard Keynes