GOP Poised To Take Credit For Improved Economy

As if Democrats’ luck isn’t bad enough, recent economic reports indicate that the economy really looks like it is beginning to take off.  Retail sales were up 0.8% in October while September’s numbers were adjusted up 0.4% to 1.0%. The Atlanta Fed’s GDPNow forecast is predicting 4th quarter GDP growth at a pretty robust 3.3%. Personal consumption expenditures (PCE) is also forecast to show a 2.9% gain. Average hourly wages are up and nominal wage growth for the year in October was a healthy 2.8%.

The PCE number is important as that is a number the Fed keeps its eye on. With strong fourth quarter GDP, rising wage growth, and rising bond yields as the markets believe in increased deficits under a Trump administration (and you thought that the GOP was filled with deficit hawks – that’s only when Democrats are in power), the Fed is almost certain to increase interest rates in December.

Of course, you can hear all the usual GOP suspects saying the economy is taking off because Trump is President and Republicans are finally in total control. Of course, it was the Democrats hard work that once again bailed the country out of its economic doldrums in the face of implacable obstruction from the GOP (see Bill Clinton’s presidency as well as Obama’s) but they won’t get much credit for it. But don’t worry – in a few years the economy will again go to hell and Democrats will be called upon again to fix the mess that the GOP created and the Republicans will begin to worry about those darn deficits again. ‘Twas ever thus.