David Sacks: The Economy Is Stronger Than You Think
“There's been a tremendous amount of economic data in just the last week or two showing that the economy is much stronger than people are giving it credit for.
So first of all, Q2 GDP was revised up to 2.2% from 1.5%, so that's basically a 50% increase. Economists had expected no revision. Q1 was also revised up to 2.5% from 2.1%. And if you look at the Q3 growth, it's tracking well above that. The Atlanta Fed GDPNow is showing around 3.7% as of late last week.
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. 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 US household income, it's now at record high. The median household income 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 -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%, and the poverty rate in the US 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.
And you've got this SI boom that the Wall Street Journal said is bigger than the railroads, the canals, and the electric grid combined, 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.”