From a small northwestern observatory…

Finance and economics generally focused on real estate

Archive for February 4th, 2017

Economic Baseline

leave a comment »

I just returned from a hectic several days in NYC.  I have to tell you, the vibrancy of the Big Apple never ceases to amaze me.  Then again, I was in Lexington, KY, week-before-last, and the core of downtown is alive with new construction.  (My darling wife speaks fondly of the Kilpatrick Index of Economic Activity, which is the number of high-rise cranes I can see from my office window.)  I was in Atlanta a week ago, and saw much the same, particularly in the tony suburbs of Cobb County.  My own main base of Seattle is awash with new construction.

Bottom line — America is actually working pretty well right now.  Unemployment is well under 5%, which is an amazing level for a developed economy.  Goldman Sachs tells me that global GDP growth should be in the 3% to 3.5% range in the coming year (where it’s been for the last 5 years) driven in no small part by a healthy U.S. economy.  According to,  U.S. GDP growth was 3.5% in the 3rd quarter of 2016, and is expected to come in at 1.9% in the 4th quarter.   Again, for a developed economy, these are not bad numbers.

One great measure of the health of the job market is the Gallup Job Creation Index, which is a weekly survey of 4,000 working adults.  It takes into account both job growth (at the respondents workplace) as well as anticipated job shrinkage.  The index bottomed below zero in 2008-09, but has steadily increased since then, and now stands as high as it has since the index was started in early 2008.  Inflation has been nearly non-existent for the entire century.

I point all this out, because this is the economic baseline that the Trump Administration takes over.  This is what they argue they will improve upon.  I don’t doubt that there are corners of the U.S. that aren’t on the same economic plane, and I would concur that we, as a nation, should direct attention in those directions.  That said, for the nation as a whole, things are going quite well.  Most of us in business have seen the flow chart that starts with the question, “Was it broken?” and asks, “yes” or “no”.  If no, then it asks, “did you mess with it?”  So, here we are, with an economy that, by and large, works pretty well for most people.  Let’s see how this works out……  I’ll keep you posted.

Written by johnkilpatrick

February 4, 2017 at 1:34 pm

%d bloggers like this: