U.S. Economic Growth Slowing In Early 2017

In this clip you can see the official news by Bloomberg (business news) that the U.S. economy has slowed in early 2017.  The economy grew by .5%, slower than the 1% expected.  Here's an overly simple analogy.  If the economy is a bath tub with 100 gallons of water in it, economists would like to see the amount of water grow by 3 to 4 gallons (3-4%) every year.  In the first three months of 2017, it grew by 1/2 gallon. 

Over the past 8 years, under the Obama administration, the economy has been growing by about 2.1% a year, or 2 gallons in our imaginary bath tub.  That's slower than most people would like, but at least it was growing slowly. 

So what is a recession?  The old, traditional definition, and still the British official definition, is when the economy shrinks two quarters in a row.  So if our bath tub loses any water for six months in a row, that USED TO BE the official definition or a recession.  But the U.S. now uses a special group and all kinds of complex stats to officially call a recession.  The reason for this is simple, when we go into a recession, they can manipulate the data and say we're not really in one, hoping it'll pass and no one will notice.  As soon as an official recession is called, people freak, and things usually get worse. 

In addition to the economy slowing down its growth the last few months, the Federal Reserve, the (unconstitutional) organization that prints our money and sets official interest rates, is going to raise interest rates at least twice more this year.  That will slow the economy more in all likelihood. 

So what does all this mean to you?  The economy is slowing down under Trump, but to be fair, the president really doesn't do much to the economy overall.  If Trump and Congress can get the major infrastructure plan going (rebuilding roads, bridges, internet hardware, etc.), that will help a lot.  If Trump and Congress can get multinational corporations to bring the 2 trillion dollars they have in other countries back into the U.S., that would help to some extent. 

But in my humble opinion, Trump has shown himself to be completely and utterly incompetent, and both political parties were shattered in the 2016 election cycle.  Trump found a huge, disgruntled group of Republicans, and Bernie Sanders found a huge disgruntled group of Democrats.  The old leadership of both parties is completely out of touch with most Americans, and they can't get shit done because they're fighting among themselves. 

My take is that the 2017 recession will actually start sometime between now and this fall.  By the old definition, it will be an official recession by either late 2017 or April 2018.  But the U.S. financial world will not actually admit there's a recession until late 2018. 

If there's a quick and serious crash of the stock markets (which is coming before too long) or another 3,000 to 5,000 retails stores close this year, or the student loan debt SLAB's start to collapse, it could all happen sooner and in a quick fashion. 

Yes, this is bad news to most people.  But it's good news to entrepreneurs and people working in fast growing and disruptive industries.  In any case, buckle up, there's a roller coaster ride in our future.