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President Biden Poll Numbers Decline As US GDP Growth Has Completely Stalled Out – Mike Swanson

We have begun a strange period in the US economy. We saw the biggest decline in quarterly economic growth since the Great Depression after the world locked down in March of 2020 and then biggest quarterly surge afterwards once things “opened” back up. But now, since July, that big growth has stalled out. In August, we saw weak consumer confidence numbers and a mix in industrial growth, as headline growth figures were positive, but industrial job growth was a wash.

Now, earlier this week, the Atlanta Federal Reserve branch released its “GDPNow” forecasting model update for the third quarter and it currently shows only 1.3% quarterly GDP growth. According to the Atlanta Fed, “after recent releases from the US Bureau of Economic Analysis, the US Census Bureau, and the Institute for Supply Management, the nowcasts of third-quarter real personal consumption expenditures growth and third-quarter real gross private domestic investment growth decreased from 1.4 percent and 12.9 percent, respectively, to 1.1 percent and 10.5 percent, respectively, while the nowcast of the contribution of the change in real net exports to third-quarter real GDP growth decreased from -1.27 percentage points to -1.57 percentage points.”

As economic growth has now stalled out we are seeing continued inflation, which is clear from new highs made in various individual commodities this month.

We saw a tremendous stock market rally last year, that now has entered a new phase too as the internals of the stock market have weakened since June. September saw a dip and we seem to be entering a slow motion malaise in the market for the rest of the year. This is no longer 2020, with stocks going up week by week in anticipation of re-openings. When it comes to stocks we have reached peak Robinhood.

When it comes to the US economy, instead of huge growth or a big a recession, we are likely to see very weak GDP growth figures going forward from here with inflation, which saw an annualized rise of 5.3% by the end of August. It will take awhile before enough people realize this is happening for it have an impact on the US stock market averages.

Right now, the key things to watch for the rest of the year are going to be bonds and the US dollar, but that’s a topic for next week. The Fed is still on track to trim its QE bond buying operations, which have helped generate massive price gains in real estate.

No one has come up with a clever nickname for the type of economy we are entering. It’s going to be one dominated by corporate zombies – companies burdened with so much debt that they can no longer expand or innovate – and what looks to be some form of stagflation. A third quarter GDP growth of 1.3% would be lower than the rate of CPI inflation if it is indeed what takes place. This is going to be the cost of 2020 corporate bailouts and easy money policies to keep things from collapsing.

This stall out in the rate of GDP growth has coincided with a slide in President Joe Biden’s public opinion numbers. A Quinnipiac University National poll released on Wednesday showed that his numbers slid to a low for him, with a negative 53% job approval rating. Only 29% of Americans polled rated the economy as excellent and 69% described it as “not good.” “This is a drop from May when 38 percent described the economy as excellent or good and 59 percent described it as not so good or poor,” according to Quinnipiac.