On Thursday, the Atlanta Fed caused a stir by revealing its new forecast of a 5.4% growth in the GDP for the first quarter of 2018 — which, should it prove to be correct, would be the strongest growth since 2009. Friday, more great economic news rolled in: jobs surpassed expectations, wages rose by more than almost a decade, and the unemployment rate continues to be way down.
According to the Bureau of Labor Statistics report released Friday, nonfarm payrolls grew by 200,000 last month — higher than predicted — and wages increased by more than they have since the end of the Great Recession in 2009. The unemployment rate now sits at 4.1%, which matches expectations.
CNBC provides a breakdown of the good news:
Economists surveyed by Reuters had been expecting jobs growth of 180,000 and an unemployment rate of 4.1 percent. A broader measure of unemployment that includes discouraged workers and those holding part-time jobs for economic reasons edged higher to 8.2 percent, the highest level since September.
In addition to the solid payroll growth, average hourly earnings were up 0.3 percent for the month, matching estimates and reflecting an annualized gain of 2.9 percent. That was the best since mid-2009 as the two-year economic slump was coming to a close. However, the average work week fell two-tenths to 34.3 hours.
CNBC notes that the stock market isn't reflecting all the good numbers, potential inflation and rising interest rates perhaps playing a role.
While the stock market could be performing better, as The Daily Wire highlighted Thursday, the overall picture of the economy is starting to reflect a true "Trump Boom." The Federal Reserve Bank of Atlanta's GDPNow model forecasts a 5.4% surge in GDP. If the forecast proves to be correct, that would be the most rapid growth since 2009.
Below is the Atlanta Fed's announcement of its GDPNow forecast:
The GDPNow model forecast for real GDP growth (seasonally adjusted annual rate) in the first quarter of 2018 is 5.4 percent on February 1, up from 4.2 percent on January 29. The forecast of real consumer spending growth increased from 3.1 percent to 4.0 percent after this morning's Manufacturing ISM Report On Business from the Institute for Supply Management, while the forecast of real private fixed-investment growth increased from 5.2 percent to 9.2 percent after the ISM report and this morning's construction spending release from the U.S. Census Bureau. The model's estimate of the dynamic factor for January—normalized to have mean 0 and standard deviation 1 and used to forecast the yet-to-be released monthly GDP source data—increased from 0.42 to 1.37 after the ISM report.