The US Economy has witnessed a growth rate of 3.2 percent in the first quarter of the year. This has given rise to the hopes that the impending recession can be taken care of. The Gross domestic product which is the measure for the goods and services prevalent in the country found itself growing at 3.2 percent during the first three months of the year 2019 and thus likely to alleviate the fears that resulted from the slow start during the beginning of the year.
It should be noted that these reports are preliminary in nature and will be revised in the days to come- possibly over the next month. That should mean the initial estimates may still hold some water. What we mean by that is economist are not yet ready to buy the truth in the reports and consider the report is a little exaggerated as things stand as of now. They still foresee a downfall over the next couple of months.
Negative clouds being prevalent, the situation, however, looks impressive enough. The job market is still stronger enough, and the consumers market also appears to be confident. These positive traits should ideally help the policy-makers to set the fears of recession aside.
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The anger that the people had seems to have subsided to a considerable extent, and the economy appears to be heading back to normalcy.
What does this mean for The Administration?
Well, for Washington, this may be good news. During the latter part of the last year, the situation was not impressive for the Trump administration. The growth did slow down, there was a huge trade deficit, and the stock market had experienced a huge plunge downward.
The conditions seem to be improving these days. The trade deficits have been experiencing narrowing trends, the stock market is finding itself being slightly renewed, and now the good news about the GDP can be something that the trump administration will find a saving grace. There have been signs of the recovery of the job market as well.
“We’re knocking it out of the park,” that is what Trump told the reporters on Friday morning to the reporters. But, you cannot expect the improvements in terms of policy-making as such. The policymakers are most likely to consider the first quarter results and the reports to be much temporary.
The future holds anything good?
Well, it may not be. The trends in the first quarter may or may not be truly rewarding. They may as well reverse in the second quarter.
The month ahead is likely to witness a dip in the overall GDP. The global trade is considerably weaker and can have a serious effect on the GDP. The analysts expect net trade to grow further ahead. However, consumer spending has been one of the strongest points and has been likely to improve recovery. While the spending had tumbled in December and January, it is recovering in the quarter and has been raising hopes.
The analysts are keeping a close watch on the world scenario. They are hoping to find a good surge in the consumer spends in the upcoming months. As Joe Brusuelas, chief economist for RSM candidly puts it, “We had a near miss on a recession, but we didn’t have one last year, We won’t have one this year. I think this is a good place for the economy to be.”
There are expectations of slow growth this year as a result of tax cuts and government spending increases. However, there is not much havoc in the minds as had been a few months ago. That should point to a better direction.