Friday's report boldly contradicts Trump's claim

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Friday's report boldly contradicts Trump's claim the country is 'dying at 1 percent GDP.'

By Ben White

10/28/16 10:54 AM EDT

Updated 10/28/16 10:54 AM ED

“This is still another reason why Trump will probably lose. The economy is in decent shape —

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NEW YORK — The U.S. economy grew at a nearly 3 percent pace in the third quarter of the year, a better-than-expected reading that dents Donald Trump’s case that growth has stalled out.

The faster pace of 2.9 percent may not hold up in the final quarter of 2016 but it offers a positive headline to Hillary Clinton less than two weeks until Election Day, with Trump struggling to erase the Democratic nominee’s lead in national and swing state polls and largely unable to make the race a referendum on a sluggish economy.

“This is still another reason why Trump will probably lose. The economy is in decent shape — so decent that the Fed will have to raise interest rates later this year,” said Greg Valliere, chief global strategist at Horizon Investments.

“This report shows a solid economy with — ironically — decent export growth. Hillary Clinton simply has to avoid gloating. But this is a big plus for her, and she may get another pleasant surprise when the October jobs report is released next Friday.”

The initial reading from the government on third quarter growth, which is subject to multiple revisions in the months ahead, comes after Trump spent portions of the campaign ripping the U.S. economy as a complete disaster. “Right now our country is dying at 1 percent GDP,” the GOP nominee said during the third debate.

Friday’s report will take that talking point away from him. It showed increases in exports, personal consumption, federal government spending and other factors lifting sluggish growth from earlier in the year.

“This shows that the U.S. is roughly on track. It’s a natural bounce back following a pretty underwhelming year so far,” Luke Bartholomew, fixed income investment manager at Aberdeen Asset Management, wrote in a note to clients Friday morning.

Some Republicans have said that consistent questions about Trump’s own business practices including his corporate bankruptcies, admission of paying no federal income tax and refusals to release his own returns undermined his case as a corporate titan capable of igniting U.S. growth.

The GOP nominee has also generated controversy with his talk about the U.S. economy as a hollowed-out hellscape of shuttered factories and violent inner-cities menaced by dangerous illegal immigrants. That message played well with much of Trump’s white, blue-collar base but alienated more moderate Republicans including those in suburbs — and revitalized city centers — who just don’t experience the economy Trump describes.

Read more: http://www.politico.com/story/2016/10/us-econ...z4OOgkWNck

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