Stocks Break Record High On Economic Surprises
The U.S. economy grew by 3.2% in the first quarter of 2019 — more than twice the 1.5% consensus growth rate expected by economists surveyed just three weeks ago!
The surprising strength immediately set off speculation about whether the strong growth was sustainable.
Headlines were skeptical that strong conditions would continue, but the press glossed over an important emerging trend.
According to independent economist Fritz Meyer, whose research we license to share with our clients and friends, the economic strength is partly attributable to an emerging trend in government spending.
Over the last few years, state and local government spending has slowly climbed back to normal following The Great recession and grew 1.8% in the 12 months ended March 31st. .
But because states and municipalities made such deep cuts from mid-2009 to late 2011. this trend has staying power.
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