An update post is here.
Another installment in a nearly-regular series of mysteries and pseudo-mysteries (usually 3-4, but this time just one) this inquiring mind would like to have answers for.
QUESTION: When is this economy going to some respect?
The economy’s 3.8% third-quarter growth (subject to revision in the coming months) was remarkable, given the storms that occurred during almost the entire final month of the quarter:
Economists had forecast GDP would advance at a 3.6% rate in the July-to-September quarter. The economy has now expanded faster than 3% for 10 straight quarters.
So when was the last time the economy expanded faster than 3% for 10 straight quarters?
It didn’t happen during the 1990s (the longest streak was eight).
It last happened during the 13 quarters from 1Q 1983 through 1Q 1986. Not coincidentally, a president who believed in lowering taxes to stimulate economic growth was in charge the last time it happened.
So despite being at war, despite devastating storms, and despite legislative and regulatory drags on the economy like Sarbanes-Oxley, this has been most consistently growing economy in almost 20 years.
Not only that, the US economy has NEVER had a streak of more than 7 quarters of 3.0% or greater annualized growth at any other time in the 58 years that quarterly GDP statistics have been kept! (besides the ones already mentioned: i.e., the current streak of 10, the 1990s streak of 8, and the 1980s streak of 13–Added Nov. 3 for clarity)
(Go here, change the First Year selection to “1947 A&Q,” and see for yourself. The 8-quarter streak was 2Q 1996 – 1Q1998. The 7-quarter streaks were 1Q 1950 – 3Q 1951 and 1Q 1963 – 3Q 1964).
Other indicators are favorable too. Unemployment is at 5.1%, up only slightly from the summer low of 4.9%, despite the storms. Core inflation (excluding food and energy) is at a paltry 1.3% and trending down (6th paragraph at USA Today link).
Yet the business press hasn’t stopped treating the economy as if it’s on fumes for almost 5 years, and as a result people who don’t pay close attention aren’t impressed. They should be. If we had a responsible and objective mainstream business press, they would be.
UPDATE: The usual disclaimers–Yes, I’m worried about overextended credit, out-of control government spending, the long-term effects of the recently-effective bankruptcy law, and a few other things. That doesn’t change the fact that the economy has kicked serious butt in the last 10 quarters, OK?
UPDATE 2: Also from the USAT piece–
But in a second report Friday, the University of Michigan’s final October index of consumer sentiment fell to 74.2 from September’s final reading of 76.9 and from a preliminary reading of 75.4 in early October, according to sources who saw the subscription-only report.
So the business press, in search of anything that might be negative, sneaked a peek at the consumer sentiment report and confirmed that their trash-talking of the economy is still working. How many people think they would have told us the reading before its official release if it had gone up instead of down?
UPDATE 3: Willisms has more perspective on how good the economy is, and has been.
UPDATE 4: You DO NOT want to miss Dr. Sanity’s take (HT to the Trackbacking Anchoress). She absolutely nails the psychological impact of the MSM’s continued ignorance and underreporting of just about any and all good economic news. It is so good I created another post for it.
Oct. 29: Wizbang Weekend Carnival participant.