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Year over year, US nominal GDP grew at a rate of 5.5% in Q3, the highest rate since Q3 2006. After almost 10 years of anemic GDP growth, the US economy is finally coming out of secular stagnation trap, the 2nd quarter in a row with pre-GFC GDP growth.

Breaking Out of Long Lunge Lower
The U.S. economy is chugging along. Gross domestic product climbed a better-than-expected 3.5 percent in the third quarter on strong consumer and business spending, according to Commerce Department figures released Friday. The annualized rate of gains marks the best back-to-back quarters of growth since 2014.

Moving Out of the Dead Zone
 The GDP picture is loaded with inventory, consumption and government spending, BUT light on investment. The capex (capital spending by companies) boost from tax cuts has been drowned out by tariff / trade headwinds.

• Strong headline. That 3.5% third-quarter advance was better-than-expected, Bloomberg noted.
• Robust consumers. They’re two-thirds of the economy, and they’re firing on all cylinders, with a 4% consumption pickup
• Subdued prices. The core price gauge rose 1.6%
• Lots of government spending. It increased at a 3.3% rate, adding 0.56 percentage point to growth
• Savings rate slip. It eased to 6.4% from 6.8%
• Trade drag. It was the most in three decades.

Pick up our latest report here: