Say, remember way back when on August 24th, 2015 (i.e. this past Monday) when the sky was falling down because of the turmoil in the Chinese stock market? Everybody was ready to hit the panic button. There were people in the United States talking about how Democrats were going to have a lot of trouble in 2016 because of the economy. Some not very smart people were (of course) blaming President Obama for the financial instability in China.
Fast forward a mere three days later, and… oh, turns out the U.S. economy grew at a rate of 3.7 percent. That’s right, the gross domestic product (GDP) of the U.S. economy grew at a rate of 3.7 percent, even though the smart economists with their fancy pens and pencils thought it would only grow at 2.3 percent. Oh, and yesterday the stock market had an amazing day, in fact, the best day it has had since 2011.
Because I’m not an economist with all the fancy pens and pencils at my disposal, I’m going to let Jordan Weissman at Slate do the talking:
“What drove growth? The biggest boost by far came from consumer spending, which may be a sign that families are feeling more confident, or at least comfy making a trip to Walmart/Target/Old Navy with the extra cash they’re saving on gasoline. Exports also grew faster than imports, for which we may be able to partly thank cheap oil. Meanwhile, business investment in things like office buildings ramped up, and companies stockpiled more goods in their inventories, which suggests they expect healthy sales in the near future.”
Now, before we party like it’s [insert random year here when a great party took place], obviously there are two still more quarters of economic indicators coming up. The economic situation in Europe is not exactly a rosy picture. Canada, our largest trading partner, is seeing their version of the dollar (the loonie) significant dropping. The price of oil has been dropping significantly over the last two months, even though the good economic news today was accompanied by an eight percent increase in global oil prices. But on the other hand, the economic outlook of the U.S. (for the moment) does not appear to be grim. So the next time people start quaking in their boots about the inevitability of another economic crisis, wait a few days. You might see their entire argument fall apart before their very eyes.