U.S. Economy Grew by 2.3% in First Quarter, Easing Slightly

I am looking forward to Trump congratulating himself on slowing down the economy

With the low value of the minimum wage and the trivial amount the majority of taxpayers got from the tax bill designed for the benefit of the super rich, it is hardly surprising that growth is lower than it could be. The article seeks to blame the Inland Revenue Service but even if the IRS had been perfect the tax bill ensured that tax reductions for the middle class were minimalist. Trade unions used to provide protection for many industrial workers incomes and forced other employers to pay more to get employees but every effort is being made to eliminate the few that still exist .

as long as the president of the united states does not have the negotiation of the Treaty of the lible trade with the other countries, the economy of his country will not flow very well. The first quarterly calculation is far from the promise of US President Donald Trump to bring economic growth at an annual rate of 3%, driven by a huge fiscal stimulus plan that includes notable tax cuts for companies and, in lesser measure, the workers.

Is anyone factoring in the effect of the mid-cohort of baby boomers who are retiring or taking Medicare as we speak. The birth years 1952-1955 were huge with 1953 the largest and 1954 in second place. This year 1952 is eligible for full social security and 1953 is eligible for Medicare. The bulge going through the snake’s belly continues through 2021. How does this affect growth when these folks are downsizing? Was this factored in when the tax cut was passed? If this was not considered when the deficit was ballooned due to the tax cut, then Congress and the President are blind, deaf, and dumb. This has to affect growth projections. Any strain on the deficit would have happened anyway when these cohorts turned 65 and 66. But did anyone think it through when constructing policy and the policy’s timing?

Where is the magical pink pony and flowers economy - it did not take long for the ecomomy to head south did it ?

The blip is named trump.

This article deals with two problems: inequality and low growth. The first is easy to understand if not cope with. It is a function of capitalism, especially neo-liberal capitalism, which produces vast differences between winners and losers. To reduce such vast differences would require re-distribution of tax burdens and other resources, which is not politically feasible at this time, because of the power of the winners. The problem of low growth is much harder to understand. It may be due to lack of investment in new capital. It may be due to a slowing of the rate of new inventions and technologies. A study of the history of recent economic history might help illuminate the problem.

With growth in GDP falling to 2.3% in the first quarter of 2018 from about 3.0% for the preceding three quarters; then workers' productivity metrics for the first quarter of 2018 should also be tamped down. With productivity crudely defined as: (Worker output/Number of workers), and using growth in GDP as a measure of worker output, with GDP growth slipping to +2.3% from +3.0%, this may help explain the lack of wage gains in the recent DOL employment reports. Say, March's disappointingly small addition of only 103,000 payroll jobs could be partially explained by the poor productivity metrics, when derived in this manner. What is to be expected for the DOL's release of its April 2018 jobs data next Friday at 8:30 a.m.? {JJL 04/27/2018 F 2:35 p.m. Greenville NC]

I have built my career as an income tax attorney planning for individuals, trusts, estate, and closely held business. I have run the numbers, the impact is below. I have projected out the incomes of clients and their future tax burden until most of the individual cuts expire on 12/31/2025. The results are very good for my clients. My clients are wealthy by any measure. They will save money on income taxes every year under the new tax bill. But with a few tweeks to their assets, they will save hundreds of thousands of dollars more. They can afford to restructure how the hold assets and what their taxable income is comprised off. The tax bill is exceptionally good for them. Personally, the new tax bill results in my family owing more income taxes. Our annual income tax bill has gone up almost $6,000. That hurts. We are not wealthy, that is not an amount that is easy to absorb in our budget. This increase has occurred because we no longer get to benefit from all of the state and local income taxes and loss of the personal exemption. Our mortgage interest barely gets us over the threshold to itemized our deductions and results in an inconsequently amount of taxes savings. If you want to know why consumer spending has gone down, these two examples are direct evidence of why. The wealthy do not spend extra money when the receive it, they save it. When the other 99% of us receive more money we spend it on healthcare, education, homes, services, etc.

Showing - once again - at the expense of the little guy, that there is no trickle down in that well dis-proven economic theory that the GOP continues to want us to buy into.

Lower growth was anticipated but not this soon. We have part of $200 B spent in damage recovery and we only see a 2.3% growth. Someone needs to review the facts and relate it to the tax debacle that must be corrected this year or we can not avoid a recession in 2019 falling into a depression in 2020. We are facing the products of economic chaos planted by 9 years of Republicanism failures to support necessary spending and their asccendance in a stolen election. Rupert Murdock, the Koch brothers, and 1400 billionaires are toasting their success. The economic fallout of their tax gift will allow them to buy up the remaining 20% of assets at $.10 on the dollar.

You write as if you BELIEVE Trump's ridiculous assumptions about tax cuts and growth!

Conservative economic policy - give money to the rich, take money from the poor, and saddle your children with bigly debt. Only a fool would vote for a conservative, and apparently there are a lot of fools in the United States.

The economy slowed in in the first quarter due the vaunted Trump tax cuts? All of the hype in the world does not change the ugly fact; consumers (workers) got a very, very small portion of the tax cuts while inflation rates rose and interest rates rose. I know if is imperative that the money people get on this and keep the mantra going claiming this may be just a 'blip'; however, I think consumers know exactly what occurred. The Republicans over-promised results for the 'average taxpayer' and under-delivered on results for those very same people. The economy is never to sustain the projected growth rate expected, and needed, to pay for this economic debacle. That is the reality that many of us knew at the time and are now witnessing in real time.

Choke off the recovery too quick? The Republicans in Congress tried the entire Obama administration to tank the economy for political purposes. Now they have power and have run up a trillion dollars more in debt to help their political friends. The Trump run up of the stock market was built off Quantitative Easing which the Rs screamed about during the Obama years. Not much has been done to help income growth for most Americans since the mentality of the wealthiest in the country has not changed and they run the Republican Party.

The real question is, when the tax cuts for the the mega rich actually reduce average economic growth, again, will the "party of personal responsibility" actually take personal responsibility for the disaster they created? Will Democrats hold them accountable and actually fight for a demand driven economy, or will Chuck Schumer and the centrist Democrats keep calling for corporate tax cuts, while not even pretending to care about workers? Will mass news draw the obvious connection between tax cuts and slow growth, or will they continue to regurgitate the lie that supply side economics needs yet another chance (against decades of evidence) because it is good for their shareholders and CEOs? The answer is that by the time the effects of the tax cuts are obvious, Democrats will be in power, and will dutifully take responsibility for the decline, even though they got no legislation passed. They will take the blame for the massive debt and the low growth, just like Obama did. Demand accountability for the results of their tax cut, or they will just do the same thing again.

The fact remains that since the end of the great recession growth in real GDP as well as in real consumer spending peaked back in the 2014-15 period and this can even been seen in the chart at the top of this article. That was of course during Obama's second term and after the tax increases of 2012 which were supposed to slow growth according supply side dogma. While GDP did slightly accelerate during 2017 that was only relative to the slowdown of late 2016 which probably had some small effect on the election outcomes. What's more remarkable is the following chart which shows the growth in real consumer spending on a year-over-year basis. During the 2014-15 period when real consumer spending growth peaked so did consumer confidence. The two can also be see rising in tandem. Since 2015 real consumer spending growth has remained remarkably stable at around 2.75% and was not affected in the least by Trump's electoral college win despite the jump in consumer confidence starting November 2016. We know that consumer confidence readings since Trump's election have been extremely polarized with Trump supporters gaining confidence while others not so much. Yet, when it comes to consumer spending there's no corresponding jump as there was in 2014-15. https://fred.stlouisfed.org/graph/fredgraph.png?g=jvkv The GDP report shows real consumer spending rose only 1.1% in Q1 which is a huge slowdown from the 4% growth pace in Q4 of last year; more so than the slowdown in GDP.

The Dow is currently exactly what it was the day Obama left the Office of the Presidency. Yet, in the land of Trump and FoxNews, that economy was horrible, while this one is fantastic. Ignorance and cult membership are so attractive in a voting bloc?

There was actually a $5.5 trillion tax cut for corporations and their shareholders, paid for with a $4 trillion tax increase on blue state workers. Since the majority of workers are in high tax states, the after tax income of most people will go down, especially after the temporary tax cuts for workers go away. This will hurt demand, which will hurt the economy. Meanwhile the corporations are already doing record breaking stock buybacks, instead of the investment in supply Republicans predicted. The economy grew twice as fast ball when the top individual rate was 70%, and the corporate rate was 50%. Tax rates and average growth have come down together since them, but neither Democrats not corridor media ever point this out. In fact Schumer was for corporate tax cuts. By the way, a little reported provision of the tax deal changed the way inflation is calculated to chained CPI. This will under estimate inflation, which will cause bracket creep as income goes up faster than the official inflation rate used. This will be negligible for shareholders who got huge permanent tax cuts. But for workers this represents a permanent and exponentially growing tax increase.

We agree that we will never pay off the $21 trillion debt, that it will only always grow, and that the trick is just to keep it at a sustainable ratio to GDP. So we have to grow the GDP for all eternity. That is the main argument against a steady state economy, and why we will continue to overpopulate the earth, pollute the atmosphere, land and seas, and suffer regional conflicts fighting over resources. Yeah, we always need some debt on the books, but really, it will be the end of us all if it is not driven back down to the 50% level without having to grow our GDP to get there. Really, when will we ever again substantially pay it off faster than we are today?

It is tone deaf for the New York Times to keep cheerleading ‘economic growth’ in such a moribund late 20th century manner. At best this is misleading, at worst, deceptive. To anybody who is been paying attention, what was once a great democracy is morphing into a corporate oligarchy. The real cost of housing, education, and healthcare is beyond the reach of the middle class. The real cost of energy, food, and fuel claims an ever larger portion of the middle class budget. This economy is growing for nobody but the super wealthy top tier of income recipients. Note that I did not say earners. For everybody else, we are in a borderline if not actual recession.

" it is below the stronger 2.9 percent annualized rate recorded in the fourth quarter of 2017, and falls short of President Trump’s goal of at least 3 percent. Most forecasters, however, expect quarterly growth to float around the 3 percent mark for the rest of the year." The NYTimes can't even tell a simple economy story without trying to whack President Trump. Come on NYTimes. You guys are not even talking about the Trump effect on the Korea's, what the heck are you reporters doing there ?

News that are good enough, even if on Trump's watch. Or is it "fake news" b e c a u s e it is on Trump's watch. Intersectional enough yet?

As usual, the prognostications fail to account for the irrationality of consumers and human behavior.

A blip. Just like the Trump presidency.

Well, perhaps this is a first glance at the effect of the tax cut law. OR, since economic effects are not separable, and other factors like increased consumer confidence, historically low interest rates, dropping unemployment, rising pressure on wages, increasing housing prices and values, increasing productivity, increasing percentages of workers with advanced degrees, increased worker participation rates, low inflation, unions coming up for air in places, falling regard for the country internationally . . . might be having a similarly unquantifiable impact on it too.

Tax cuts for the working class won't even cover the increase that has already occurred in gasoline prices. Those corporate bigwigs got bonuses, so it's okay and things are good, right? Economic growth isn't going to occur without greater demand from that same working class. Without significant wage increases that's just not going to happen. Republicans have sold a bill of goods to the entire country and it will only become more obvious as the calendar ticks along.

2.3% for the first quarter was a lot better than expected and estimates are around 3% for the rest of the year. So this is really great news. However, we cannot sustain this pace, unless we continue to borrow. And that will doom us in the long term. At some point one has to pay one's bills.

The ludicrous tax cut mostly benefits businesses, who have been busily buying back shares to boost their already inflated prices for the uber rich to swap among themselves. Meanwhile, the middle class marches on to the tune of no wage increases, no benefits, and no retirement savings. But, hey, they can get Amazon packages of paper towels delivered to their cars! Trump's departure from the White House in 2020 will be accompanied by a full-blown debt crisis and a Dow Jones index below 10,000.

I understand that this is early on in the process but in order for the GOP's 2018 tax cut to "pay for itself" the economy will need to grow by 2.9% annually. If my meager arithmetic skills are working, this means that we'll need to hit an annualized rate of 3.1% over the next 3 q's in order not to be in a hole in year one of these cuts. That might not seem like a real tall order but it looks like the experience of the past three years shows growth from q1 through q3 and then a tanking in q4. And while some will argue that factors such as weather depressed the first quarter's results, a counter argument can be made that the ballyhooed (one time) payments to workers after enactment of the tax bill would have offset those negatives. At the end of the day I think it's inescapable simply given the vagaries of the business cycle that we're gonna see the deficit and national debt expand - something that apparently was problematic only when President Obama was in office and fighting to save the economy and, incidentally capitalism. The inevitable consequence of continuing deficits and growing debt is that programs that the great majority of Americans count on, including federal funding for Medicare Part B (physician and outpatient care) and Part D (the prescription drug benefit) will be "budgetary fat" cut when both parties agree to get serious about the deficit/national debt.

To justify holding their tax cut to a $1.5 trillion deficit Republicans in Congress (Mitch McConnell) said growth would be 0.4 percentage points higher than the long term average (i.e., 2.9%). The CBO and the Joint Tax Committee both said that a 0.4% increase would not be enough to pay for the tax cut even allowing for $1.5 trillion to be added to the deficit.

Trump promised 4%, not 3%. now we're getting 2.3%. Clearly there is a complete lack of accountability.

The government is not the only entity in debt. Many people who have been surviving passably and will now get an extra relative trickle in their paychecks are going to use it to pay down credit cards or other debt, or slide a little extra into savings against the time when the bill comes due for this $1.5 trillion tax cut, if they're even half smart. That means that money isn't getting spent on goods or services. Giving a huge bundle to the rich doesn't get it done - they aren't going to spend any more than they already were, which is never even close to what they have available to spend.

It is difficult to prove, but it just seems that severe income equality will, finally, be shown to be a drag on the economy, a sea anchor of sorts. Working people are just falling further behind every day. This is an area that economists seem to either ignore or fail to grasp.

In theory this is good ie you don't want recession or overheating GDP numbers. However one month does not mean much. With the rifling of the treasury by republicans and corporations with no spending cuts, the end is near. The only question is when and how bad.

We didn't see an increase in spending after the tax cut because people don't have money to spend. This isn't rocket science. Half the population lives paycheck to paycheck. Covering everyone's Costco membership for the year is pointless if they can't buy anything once they're through the doors. Although it's apparently really hard for the oligarchs and Republican cronies to grasp, a living wage across the board is required if you want to increase consumer spending.