By Brent Schuttle via

What a difference a year makes. It is hard to recall, but at the turn of the calendar to 2017, investors were debating whether stronger economic growth would ever return, largely because it had been so weak for much of late 2015 and 2016. Even as consumer and business confidence surveys were pointing to a brighter future, many investors were losing patience waiting for them to be reflected in strong “actual” economic growth. Indeed, the debate on Wall Street became whether the historical link between “soft” survey or feelings-based data and actual “hard” bean-counting economic growth (gross domestic product) was broken.

We expressed our belief that soft data surveys had earned the right to be called leading economic indicators because they had historically led the hard data. Put more simply, before you “actually” act, you must “feel” confident first. And, right on cue, economic growth over the past three quarters has accelerated. After back-to-back 3% plus quarter-over-quarter real economic growth in the second and third quarters, the United States economy looks set to post 3% plus fourth-quarter growth. This would mark the first time since late 2004 that the U.S. economy has posted three consecutive 3% plus quarters in a row.

And this growth expansion has occurred before tax reform has taken hold. While much of the current tax reform chatter revolves around the intermediate- to longer-term outcome, we believe that argument is highly subjective because the economic models that are being used to moderate the discussion have high margins of error.

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