The economy grew more than economists predicted during the second quarter of this year, or did it?
Economists predicted that the economy would grow by 1.8 percent during the second quarter, but the Commerce Department initially estimated that it grew at a rate of 2.1 percent because of better than expected consumer spending.
A majority of economist now believe that growth during the second quarter will be revised downward to meet their initial expectations.
The economy grew at a 2.1% annualized rate in the second quarter, slowing from the first quarter’s brisk 3.1% pace. Growth is seen below a 2.0% rate in the July-September quarter.
But economists expect the government will lower its second-quarter GDP growth estimate to around a 1.8% rate later this month after a separate report from the Commerce Department on Thursday showed wholesale inventories were unchanged in June instead of rising 0.2% as reported last month.
The component of wholesale inventories that goes into the calculation of gross domestic product edged up 0.1% in June.
That suggested the pace of inventory accumulation was much slower than the government had assumed when it compiled its advance GDP report last month.
I'm not going to suggest that the Trump regime has been cooking the books because they don't necessarily need to when they can just plug their assumptions in.
You may recall that economic growth for all of 2018 was also recently revised downward because businesses did not invest as much as the Commerce Department assumed they would after receiving a $1.5 trillion tax cut.
It's normal for measures of economic growth to revised upward or downward, and it's normal for the department to make a certain amount of assumption, but things are not ordinarily as precarious as they are under Trump's trade war. Baseline assumptions may not suffice at a time when Trump's whims can wildly shift economic sentiment on a week-to-week basis. Furthermore, I don't know if we can trust the nincompoops and toadies appointed or promoted by Secretary Wilbur Ross to make safe assumptions.
It remains to be seen what will happen after Trump imposes tariffs on all remaining Chinese goods not already subject to tariffs; a wide range of consumer goods that average people are going to pay higher prices for.