Ignorant press 'surprised' by 3.2% blowout GDP number

First-quarter gross domestic product numbers are in, and they are a blowout, 3.2% growth, coming on top of similar numbers in previous quarters based on President Trump's pro-growth economic policies.

But to much of the press, even the financial press, that's a...surprise.

Get a load of these headlines.

U.S. Economy Powers Ahead In First Quarter: 3.2% Growth -NPR

US economy grows by 3.2% in the first quarter, topping expectations -CBNC

The US economy blows past growth expectations in the first quarter -Business Insider

The American economy looked like a drag just a few months ago. Not anymore -CNN

U.S. economy grows 3.2% in the first quarter, well above estimates -Yahoo! Finance

U.S. Growth of 3.2% Tops Forecasts on Trade, Inventory Boost -Bloomberg

Topping expectations, blowing past expectations, well above estimates, tops forecasts, all of it 'unexpectedly' so.  Some analysts cited in the various reports erroneously suggested that since tax cuts were done, that factor as a growth indicator was all done.  It's nonsense, because tax cuts have been long known to have extended knock-on effects, something that baffles the Left.  When you have more money in your pocket, month after month, it's not rocket science to say that that factor, brought on by tax cuts, often leads to investment.

Charles Payne at Fox News, a seasoned financial journalist, gave the bug-eyed headlines a sidelong glance in this tweet:

He made that tweet obviously knowing that GDP isn't normally an important number for moving markets (though it did today, based on all those 'unexpectedlys' in the headlines) because it doesn't predict the future; it's known as a coincident indicator.  Years ago, I covered bond markets and know that you can come fairly close to predicting GDP before it comes out based on the numbers already out, particularly the leading indicators.  Good numbers, good GDP; bad numbers, Obama-style GDP.

So what did the leading indicators tell us in this first quarter?  Well, Investopedia calls housing starts and money supply (or M2) good leading indicators, as well as the yield curve, which can be very, very right (but sometimes isn't).  I've also seen consumer confidence, business investment, inventories, and the Fed's Beige Book called good leading indicators.

What did we see with 1Q housing starts?  A blowout number in January and some so-so numbers in the next two months, according to Trading Economics, which averages still to a high number.  Check.

Money supply?  Up.  Sign of a heating economy.  Check.

Consumer confidence?  Lookin' good!  Check.

Business investment?  Not enough data according to Trading Economics to fill, but notice the very large spike in it at the end of 2017 — something that easily could have filtered through to create the impact for 1Q today.  I'm going to argue check on that one, too.

The numbers clearly pointed to a strong GDP.  Yet so many were 'surprised' by it.  Maybe if they paid attention to someone like Payne, who knows how to read classic economic indicators, they wouldn't be so surprised.

Update: John Merline of Issues & Insights has a good one about the matter, too.

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