The U.S. economy is roaring, at least for now. Macroeconomic Advisers, which runs one of the more sophisticated economic forecasting models, is tracking a 5.3 percent growth rate in the second quarter. That would be the fastest pace in almost 15 years.
A narrowing trade deficit, tax cuts coupled with more government spending, a resurgent consumer and decent business investment are all supporting what appears to be a strong rebound in growth. The Atlanta Fed’s GDPNow model shows a 4.5 percent growth rate, although such estimates jump around as new data arrives.
But we’ve seen economic head fakes before—gross domestic product advanced 5.2 percent in the second quarter of 2014 only to quickly revert to the mean. Overall, growth has averaged about 2 percent during the current expansion.
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