The following speaks to why we do our own work!


Here’s White House top economist Larry Kudlow last July:

“We are getting 3 [percent GDP growth] and it may be 4 for a quarter or two.”

Here’s yours truly last July:

“….we expect this week’s Q2 U.S. GDP report to come in at the high-end of expectations, and, thus, there’ll be the attendant “we-told-you-sos” and “see-we-know-what-we’re-doings” coming from White House officials – which, by the way, would be deserved self-pats on the back, given the justifiable optimism spawned over tax cuts and deregulation! 

Our warning herein being that while such celebratory (possibly 4%+) growth, were it completely unhindered, would be difficult enough for an advanced economy to sustain over the long run, add in a global trade war and we can say with confidence that, ultimately – should the TW become a protracted affair – we’ll see the GDP number decline precipitously off of whatever Q2 delivers. It’s also fair to say that Q2’s results will reflect a pulling forward of activity, as companies rushed to get business done at the more favorable terms that existed before the unfortunate imposition of tariffs coming and going; a phenomenon that by itself sets us up for a marked letdown in future quarters.”

Here are the GDP prints since last July:

Q3 2018: 2.9%
Q4 2018: 1.1%
Q1 2019: 3.1% (while still a long way from 4%, perhaps more pull-forward ahead of then threatened tariffs)
Q2 2019: 2.9%

P.S. We’re as capable as anyone of missing a forecast, or misjudging events and circumstances (in fact, we invite it, as we’re forever putting our theses to the test), but it’ll never be because we took someone else’s word for it…