By Brent Schutte via Iris.xyz
The reports of the coming economic demise continue to prove premature. For much of the past few years, we have filled these pages with our data-driven retort to the constant noise about the next impending economic and market downturn. One year ago, after United States gross domestic product (GDP) fell to 1.2% year-over-year from a recovery high of 3.8% in early 2015, we titled our commentary, “To Every Season Turn, Turn, Turn.”
We expressed our belief that the conditions for rising future U.S. and global economic growth were in place. After a weak first-quarter 2017 U.S. growth report caused many to doubt the accuracy of our prior forecast, we reiterated our position in a commentary titled, “It’s More Than a Feeling.” Why? Because we noted that even with the weak first-quarter GDP report, the forward-looking economic leading indicators – notably business and consumer confidence – pointed to stronger growth ahead.
Consider it done. Indeed, second-quarter U.S. economic growth recently clicked in at a robust 3.1% quarter-over-quarter rate, which pushed the year-over-year number to 2.2%. And we note during the third quarter that these same leading economic indicators leading us to forecast rising economic growth in the second quarter kept expanding.
Indeed, both the Institute for Supply Management’s Manufacturing and Non-Manufacturing Index reports on business continue to post extremely strong readings in the third quarter, with the leading indicator of new orders at expansion highs and at levels that have historically led to strong future economic growth.
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