re: 3rd quarter GDP second estimate bumped up from 3.0% to 3.3%

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What if we discover some Uber cheap way of producing something or extracting resources at less costly rate?

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Like, maybe, ecommerce?

Crap if you're stuck with a mall property where all the stores are closing. Great if you hate going to the dead mall property overrun by thugs.

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That the 3% standard mentioned on this board is some sign of a healthy economy

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Because for 8 years the past POTUS couldn't get us to 3% and substain that rate of growth.

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over 3 is a sign of an unstable American economy.

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So 1% is better because its "stable"??? 2% is better because its "stable"???

I didn't win the Nobel Prize for economics, but I call BS on that.

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I'm curious though. What did they base this on?

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I think it's based on the policies outlined in the Trump budget proposal ( https://www.whitehouse.gov/sites/whitehouse.gov/files/omb/budget/fy2018/budget.pdf ).

Here is how it is compared to the CBO. I'm pretty sure the CBO and the Trump admin arrive at their projections with different data assumptions. With that said, 3% is not a crazy number given the fact that it is the historical average and we will probably hit 3% this year or very close to it even with a 1.4% first quarter.



ETA: the economy is already beating both Trump and CBO estimates.

Based on this chart, should we expect a somewhere in between the two projections?

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It's not based on anything but the 3% postwar average

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It seems logical to me to "grade" economies based on the average.

No one is saying the average economy is "bad", it's average. Above average would be good. Below average bad.

Of course an economy growing just under 3% or just over 3% in reality is the same. 3% isn't some magic number.

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3% isn't some magic number.

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Apparently 3% is some sort of GDP red line

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Apparently 3% is some sort of GDP red line

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It's the growth rate used to calculate projected revenues into the Treasury based on his current budget proposal (that congress has not touched). That’s why 3% is currently important.

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It seems logical to me to "grade" economies based on the average.

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Sure, but it doesn't seem logical to use it as a projection for a budget dependent on its accuracy and risk.

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Fine, but define modern?

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post-1992? post-2000? post-2007? I don't see how a delineation matters. (eta: that 3% is a postwar average, so the mid-century economy is what i'm saying we're fundamentally different from)

Look at the dominant sectors now or in some recent year in terms of either output or workforce and compare it to the early years of the postwar era. It's weird to call those two things the "same" economy.

For now I guess what I'm calling "modern" is more tech- and services-driven and less manufacturing-driven workforce, for a crude summary. A shift toward high-value and high-skilled services and white collar work dominating the middle class, instead of blue-collar and unskilled. Those lines of distinction are easiest to see and I think we'd agree they are fundamentally meaningful to how you'd classify an economy.

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but if the average is 3%, and you get stuck around 2%, can you say that's good because its stable? I can't.

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the argument here is that what you're calling the average is wrong- it's too high because the economy/workforce now can not look like some of those decades so long ago, with consistent very-high-growth years. in fact it's very possible that 2017 will turn out to be on the high side of what we call potential output; those who try to measure it put at closer to 2% than 3, and some even have it in the high 1's (adjusted for inflation)