Strong economic data contradicts the gloomy narrative

Transcript

Transcribed by machine (Whisper) from the episode’s audio, so a word may be off here and there.

1. 45:19

   them, like Sal Khan would be the perfect example of Khan Academy. Zach, you got any final thoughts here? Well, I mean, I kind of wanted to broaden out this conversation to the economy as a whole, because I do think that the dumerism is affecting people's perception of the economy. Yeah, that's why I'm bringing it up. Yeah. And I think that actually, there's been a tremendous amount of economic data in just last week or two showing that the economy is much stronger than people are giving it credit for. I mean, yes, I know that diesel prices are too high and rates are high, but those are the only two variables that you ever hear about. Let's look at some of the other numbers that have just come out because I think it's pretty extraordinary. So first of all, Q2 GDP was revised up to 2.2% up from 1.5%. So that's basically a 50% increase. Economists

2. 46:07

   expected no revision q1 was also revised up to 2.5 percent from 2.1 percent and if you look at the q3 growth it's tracking well above that the atlanta fed gdp now is showing around 3.7 percent as of late last week august payrolls just came out plus 162 000 the consensus was only 55 000 so it's a beat of about 107 000 jobs june and july were also revised up by combined 55 000 So unemployment is still near record lows at 4.1%, even though labor participation rose 0.2% to 61.6%.

3. 46:46

   So good news on the jobs front, good news on the GDP front. The economy is running hot. And then there was also some good news on inflation. We saw that core PCE just came in at 3.0% versus 3.3% expected. So inflation is still a bit too high, but actually it is cooling and beating expectations. And then finally, you look at manufacturing, we're seeing a huge wave of re-industrialization in this country.

4. 47:14

   A couple of the measures are the Chicago PMI and then ISM manufacturing. They both are well into expansion territory and beating forecasts. Just one last point. Let's talk about poverty for a second, because I want to address the idea that this is just a K-shaped recovery. So if you look at U.S. household income, it's now at record high. The median household income in 2025 dollars is almost $90,000. And after-tax household income is growing again in the second Trump term. It's averaged 3.1% a year in Trump 47. It was 3.9% in Trump 45, and it was minus 1.2% in Biden's term as a four-year average. So we're seeing that after-tax household incomes have risen by 3.1% just in 2025. And the poverty rate in the U.S.

5. 48:12

   has fallen to its lowest level in history, 10.2%. So the poverty rate, the child poverty rate, These are all at historic lows. The average household's real income after inflation, after taxes is increasing for the first time in years. So there is a lot of strong economic data out there. And I think that this is why, you know, if I was to guess, I actually think that the Republicans are going to do better in the midterms than some of these polls are predicting, because I think the press around the economy has been very negative.

6. 48:44

   But I think people are starting to feel that the economy is accelerating. And that was actually a headline in the Wall Street Journal just the last couple of days, that the economy is accelerating right now. So again, you've got this AI boom or SI boom. You've got the infrastructure build out that, again, the Wall Street Journal said is bigger than the railroads, the canals, and the electric grid combined.

7. 49:05

   And all these things are basically fueling strong growth in the economy. And again, I would just dispute the K-shaped narrative because the poor are benefiting and the average household are benefiting as well. They don't feel that way, but I guess... I get the sentiment. I agree with you.