Saturday, August 26, 2017

Where we stand

In March of last year I said We are at the bottom now, ready to go up.  I said:

This is going to be the full tilt, rapid output growth, rapid productivity growth, high performance boom.

We're still waiting. I know. But it's still mid-2017. That puts us just about midway between the start of 2016 and the start of 2019. I marked the current moment on this graph:

Graph #1: Markup of Graph #4 from mine of  3 March 2016
The prediction on the graph runs flat till just about now, and then begins the vigor.

Now consider this FRED graph, modified from a FREDBlog post:

Graph #2: Three Measures of RGDP Growth, March 2016 to August 2017
I modified the FRED Blog graph so it starts in March 2016 and ends at the current moment, August 2017. At the start, all three lines are midrange, between 1.5% and 2.0% growth. Then, for most of the graph, the lines contradict each other. But so far this year, the three lines are coming together and moving higher. It is a hint of better economic growth to come.

The FRED graph is compatible with my prediction. Can't see it? That's because I'm telling you early. If I waited until it was obvious, it wouldn't be a prediction.

Two of the three lines are running off the top of the plot window, and the third is headed in that direction. It's not exactly a consensus, but it is an indication. Note also that the top edge of the plot window shows a growth rate of 3.5%.

I'd like to remind Menzie Chinn that Trump was talking about 3.5% to 4% growth.

It won't be long. DJT will be telling us he has succeeded in making America "great again" because we got good growth. Don't believe it. We were going to get good growth anyway.


The Arthurian said...

The bankers disagree.

jim said...

If you want to know where ilegal immigration is going then follow the price of corn:

After the price of corn more than doubled around 2006 the net flow of immigrants across the US southern border dropped to zero

The low price of corn coupled with NAFTA was the primary cause of the huge influx of immigrants before 2007. 2 million corn farmers in Mexico alone lost their livelihood.

The Arthurian said...

RGDP Growth. I'm thinkin up over 3%. And then there's the New York Fed.

The New York Fed DSGE Model Forecast—August 2017:

"This post presents our quarterly update of the economic forecasts generated by the Federal Reserve Bank of New York’s dynamic stochastic general equilibrium (DSGE) model...
... not an official New York Fed forecast, but ...
The current GDP growth forecast is essentially in line with May’s projection. GDP growth is projected to be about 2.0 percent in 2017 and 2018 (in Q4/Q4 terms) and to pick up modestly in the following years

Their table of predictions shows 2.0% RGDP growth for 2017, 1.9% for 2018, 2.1% for 2019, and 2.2% for 2020.

We'll be close to 4% by 2020.