The data is just getting better, could the US economy be on the verge of seeing its best performance in at least ten years? And if so, may this spread to the UK?
The data
The US economy grew by 3.0 per cent (annualised) in the third quarter, according the the latest data. It grew by 3.1 per cent in Q2.
These are good numbers, but not exceptional. The US enjoyed higher growth over a six month period in Q2 and Q3 2014, for example.
But there may be even better news in the pipeline. The surveys, which tend to give a reasonable indication of what might happen next, point to even more rapid growth later this year and early next.
Take the purchasing managers indexes, the latest indexes tracking manufacturing and non-manufacturing for September, hit their highest levels since 2004 and 2005, respectively.
The latest US consumer confidence index from the Conference Board is close to a 17-year high.
Should we be surprised?
History tells us that recessions are followed by booms. The deeper the recession, the stronger the boom. The recent economic period has been unusual for seeing the worse recession since the 1930s, followed by a very shallow recovery. Maybe the latest data is telling us that history is simply re-asserting itself.
There is a bigger point. If the extraordinary advances we are seeing in technology: AI, additive manufacturing, IoT, and so on, does not create a boom, something is very wrong.
But not all are so upbeat.
Paul Ashworth, Chief US Economist at Capital Economics said that he expects growth to continue at this kind of pace next year, but slow sharply in 2019.
Stimulus and the FED
Two other factors come into play. President Trump is still pushing for a $1.5 trillion stimulus programme - it is difficult to quantify the implications of this, should it happen. It may boost the economy too much, creating inflation, or may support what has become known as the Fourth Industrial Revolution, ensuring demand across the economy grows in tandem with the extra productive potential that technology should (in theory) create.
Then there is the FED, which may increase rates later today. Although with an announcement pending on the identity of the next FED chair, it may delay a decision to the next meeting.
