Economic Growth Lags Far Behind Our Current Stockmarket Boom

Pedestrians pass in front of stores in the Soho neighborhood of New York on Monday. Sales at the nation’s retailers—a key measure of consumer spending—rose just 0.1% in February. PHOTO: VICTOR J. BLUE/BLOOMBERG NEWS

As we suspected, based on what we had read in Piketty about economic growth in advanced Western countries for the future, the GDP, in spite of the present booming stockmarket, fails to grow above 2% or less, as this article culled from the Wall Street Journal  clearly indicates.

By JOSH MITCHELL, March 15, 2017, for the Wall Street Journal

The latest evidence came Wednesday when the government reported that sales at the nation’s retailers—a key measure of consumer spending—rose just 0.1% in February from a month earlier.

Americans cut spending on clothing, sporting goods, electronics and restaurant outings, leading to the smallest gain in retail sales since last summer.

Earlier reports showed a surging trade deficit in January and a recent drop in home sales, as measured by contract signings.

Taken together, the economy appears to be stumbling once again in the first months of the year, despite unusually warm weather that might otherwise boost spending and the absence of major crises overseas, as happened in the past.

Forecasting firm Macroeconomic Advisers on Wednesday downgraded its projection of economic growth in the current quarter to an annual rate of 1.3%, from 1.4%. Barclays projected 1.4% growth, compared with 1.6% earlier.

The Federal Reserve Bank of Atlanta’s GDPNow model lowered its estimate to 0.9% from 1.2%. Growth has averaged about 2% in the current expansion.

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