Always, Always Income

Just before Christmas 2014, the Bureau of Economic Analysis upgraded Q3 2014 Real GDP to +5.0%. That represented a huge acceleration from earlier that year when during the depths of its Polar Vortex infused winter Q1 2014 GDP had contracted sharply (according to contemporary estimates). One need not be a betting man to hazard a correct guess as to which quarter gained all the attention and focus.

The statement from the White House three years ago was rather typical:

Today’s upward revision indicates that the economy grew in the third quarter at the fastest pace in over a decade. The strong GDP growth is consistent with a broad range of other indicators showing improvement in the labor market, increasing domestic energy security, and continued low health cost growth. The steps that we took early on to rescue our economy and rebuild it on a new foundation helped make 2014 already the strongest year for job growth since the 1990s.

This was a sentiment widely shared, an assurance, almost, that the worst was finally over and the recovery about to commence – if, indeed, it hadn’t already during that 5% whirlwind of activity.

Evidence is mounting that the U.S. economy is kicking into high gear.

Gross domestic product soared 5% on an annual basis in the third quarter, the government said on Tuesday.

To put that in perspective, it’s the strongest quarter of growth since 2003.

It simply never occurred to anyone that even two consecutive quarters of actually good growth would be anything other than what everyone was waiting for. Yet, all the warning signs were there, starting with that atrocious snow-driven first quarter. Everything is always extrapolated in a straight line, which for 2014 meant acceleration toward the stratosphere and never looking back.

After having suffered through the abject disappointment of what did follow in 2015 and 2016, you would think there would have been deep and abiding interest in not making the same mistakes. Nope. Part of that stems from the fact that there isn’t now three years later an honest attempt to explain what happened. In the mainstream narrative, it’s as if the economy is still accelerating toward recovery, stalled out just temporarily.