Anybody who read “Trade”, Chapter 26 of Project 2025, could have foreseen the split and eventual purge of the Heritage Foundation, at least on the economic policy dimension (not that we knew which side would get purged). To say the chapter is schizophrenic is an understatement of the highest order. Peter Navarro wrote “The case for fair trade” while Kent Lassman wrote “The case for free trade”.
Unsurprisingly, the former leads the latter, but the lag is (highly) variable.
GDP growth of 4.3% far exceeded the 3.3% consensus forecast. However, as a survivor of the 2001 “is it or not” recession debate*, I think it useful to consider the revisions that occur to GDP growth. Here’s a picture of levels of GDP for 2001, according to different vintages.
EJ Antoni writes a letter to WaPo editors:
“that the Heritage Foundation has become a protectionist bivouac. Au contraire, Heritage has been, is, and will continue to be a bastion of free-market conservatism.”
With a surprising outcome in GDP [Hamilton/Econbrowser] [Chinn/Econbrowser], recall that other indicators are relevant, particularly given the record of GDP revisions over time.
Following up on Jim’s post yesterday, here are some additional thoughts on the “initial” (consolidated advance and 2nd) release: (1) GDP far exceeds nowcasts, (2) potentially more momentum-relevant “core GDP” advances strongly, but much less so than GDP, and (3) alternative estimates of economic activity like GDO suggest slower growth.
The Bureau of Economic Analysis announced today that seasonally adjusted U.S. real GDP grew at a 4.3% annual rate in the third quarter. That is somewhat higher than both the historical average growth and the value anticipated by many forecasters.
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From Bloomberg:
A survey:
That’s EJ Antoni, who has not a single peer-reviewed paper.