As Larry Kudlow points out, the “Goldilocks US Economy” just keeps growing and surprising the “experts.”
Though Mr. Bush never gets any credit for the strong economy, the reality is that economic growth continues to surprise everyone. Today’s real GDP report came in at 3.5 percent at an annual rate for the October-December period in 2006.
Consumer spending was very strong (+4.4 percent) for both durable and non-durable goods (+6.0 percent and +6.9 percent, respectively). Business capital investment spending was weak (-0.4 percent), perhaps due to energy prices, but we believe it will rebound.
Price inflation inside the report was very low around 2 percent with one major price gauge actually declining for its biggest drop in 52 years. Treasury yields inched lower in response to the data, including the 10-year TIP yield, the economy’s natural rate proxy. However, the 10-year TIP spread, the market’s inflation expectations, was unchanged and remains within the range dating back to early-2004.
For the whole year, GDP advanced 3.4 percent following 3.2 percent last year, 3.4 percent in 2004, and 3.7 percent in 2003.
The highly diverse and resilient American economy has not been derailed by a temporary housing slump, which occurred last year following many years of outsized gains. Excluding the drag from housing investment, real GDP growth in the 4th quarter was 4.8 percent and was 4.3 percent for the year.
Mr. Bush is on the right track as he follows classical supply-side economic principles. He deserves a better polling fate for this achievement. Be that as it may be, the Goldilocks economy, not too hot and not too cold, continues to defeat all the pessimists and nay-sayers out there.
So… are you ready for it? Since, according to the MadLibs, this is the most inept, yet evil-brilliant President ever… we must do it… altogether now… say it in unison:
IT… IS… ALL… BUSH’S… FAULT!
[RELATED STORY: Economy Grows at 3.5 Percent in 4th Quarter – BREITBART.com]
PS – Five gets you ten that the CBS Evening News with Katie Couric tonight will lead with: “Despite the words of the President today, the one person we searched all day to find in our Blue State community says he can’t find a job and the economy sucks….”
I’ll bet ya a million.
UPDATE (from GPW): Via Instapundit, I learn that when the President visited the floor of the New York Stock Exchange, “all the floor brokers and their assistants stopped work and started cheering and applauding.” Hmm. . . . the president on the floor of the NY Stock Exchange, only the second sitting Chief Executive in U.S. history to make such a visit and the market rallies to “another trading high.”