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Noem Ignores Reality of Robust American Economy

In bracing legislators for a “back to normal” budget absent the massive federal investments that made budgeting easy in Pierre for the last few Sessions, Governor Kristi Noem claimed “America’s national economy continues to tank because of the extremist policies of the Biden Administration.”

The word “tank” may be used appropriately in describing the robust national economy only in a phrase like, “The American economy continues to roll like a tank over negative expectations and Republican spin”:

Good news about America’s economy seems to keep rolling in. In the third quarter, GDP expanded by a barnstorming 4.9% in annualised terms. Heading into earnings season, the month or so each quarter when most firms report their latest results, a stream of upbeat economic figures led stockmarket analysts to hold their profit expectations for the quarter steady, rather than trim them like normal. Many called the end of America’s corporate-earnings recession. Such optimism now looks justified. Following a hat-trick of consecutive year-on-year quarterly profit declines, America Inc’s bottom line is growing again…. According to FactSet, a data provider, of the half of big firms in the S&P 500 index that have reported their results, 78% have beaten profit expectations… [“America’s Economy Is Booming. Why Aren’t Its Bosses Happier?The Economist, 2023.10.29].

The recession that’s been six months away for three years appears not to be coming:

The report also showed underlying inflation subsiding considerably last quarter. Most economists have revised their forecasts and now believe the Fed can engineer a “soft-landing” for the economy, citing expectations that the July-September period will show a continuation of second-quarter strength in worker productivity and moderation in unit labor costs.

“We’ve seen for a period of time now a post pandemic induced negative bias about an imminent recession and persistent inflation,” said Brian Bethune, an economics professor at Boston College. “But not only is the economy surprisingly resilient, we also got productivity-driven growth for two consecutive quarters in 2023, meaning the business cycle still looks very solid” [Lucia Mutikani, “US Economy Delivers Blockbuster Performance in Third Quarter,” Reuters, 2023.10.26].

People everywhere just keep buying stuff:

Robust consumer spending fueled growth in the third quarter, a sign of the economy’s surprising resilience in the face of tougher borrowing costs and persistently high inflation. Spending grew from July through September by an annualized rate of 4%, its strongest pace since the fourth quarter of 2021. Americans splurged both on goods and services.

Indeed, packed Taylor Swift and Beyoncé concerts and record tickets sales for the “Barbie” film were a hallmark of this year’s summer months. Americans also spent big on travel.

GDP expanded in the July-through-September period at its fastest pace in nearly two years, defying expectations in the aftermath of the spring banking crisis that the US economy would slip into recession by now [Bryan Mena, “The US Economy Grew at a Blistering Rate Despite High Interest Rates,” CNN, 2023.10.26].

Nearly every story about the robust, booming American economy includes comments from economists, including Treasury Secretary Janet Yellen, saying the boom isn’t sustainable, GDP will settle down, so state budgeters may want to temper their aspirations. But only by a Noemy stretch of political imagination can anyone say “America’s national economy continues to tank.” There has been no tanking to continue, and the economy is not tanking now.


  1. Tim 2023-10-31 07:18

    She has always had issues with the truth, why should this be any different?

  2. David Newquist 2023-10-31 08:13

    Another example of Noem compos mentis.

  3. O 2023-10-31 08:16

    Cory, your metrics tend to fall into metrics more important to the investor class — the group that is in the bag for the GOP and its inevitable tax cuts. How is the economy for the workers? How are salaries moving? How are unions strengthening? How are rent prices? I would like to see discussion of how America is doing that shifts focus from how the the 1% are doing.

  4. Donald Pay 2023-10-31 08:47

    There have been some recent announcements in Wisconsin about layoffs. There were a few in manufacturing, but most job reduction has been in health care or with various state university campuses. The higher ed job cuts result from our Republican legislators efforts to starve education. If anyone is tanking the economy in Wisconsin it’s the Republicans.

  5. John 2023-10-31 09:37

    Great analysis and discussion. Thanks!
    It worthy adding that, unfortunately, war is good for the US economy. The US is supporting two hot wars by doing what it does best – making stuff and shipping it. Almost all of the US “spending” on Ukraine and Israel is essentially domestic US production and consumption. The dear Russians made a mighty sacrifice of 300,000 + bodies that allowed the US to rotate and refresh our armaments and equipment without having to pay decommissioning costs. (Most of what the US sent to Ukraine was US surpluses.)

    O, the 1% are not necessarily doing so well . . . 76% of S&P 500 stocks are below their 200 moving day average. The 1% are begging for Uncle Joe’s recession but cannot find it . . . for 3 years. Republicans cannot run the US economy any better than they run the US Speaker’s Office.

  6. P. Aitch 2023-10-31 09:56

    66% of America did a fantastic job keeping Covid from killing every senior citizen in our country. Thank you from a 70-80 year old. I’m glad to be here. *The other 34% proved they’re definitely NOT “foxhole material”.
    We as Americans deserve a concert, a movie, and a night on the town.
    Restaurant sales are essentially booming:
    Key findings: Growth will continue: The foodservice industry is forecast to reach $997B in sales in 2023, driven in part by higher menu prices. Industry help wanted: The foodservice industry workforce is projected to grow by 500,000 jobs.

  7. sx123 2023-10-31 10:16

    I am guessing the economy is at an impasse. There was a boost in consumer spending, but can’t imagine that lasts since many are stressed about interested rates and credit card debt is at record high per GAO.

  8. O 2023-10-31 11:18

    John, even by your metric, the 1% are doing well. The amount they would have to lose to not be doing well is almost unimaginable. I agree completely that the GOP is inept with the economy; my larger point is that economic discussions ought to focus on different metrics to asses how well workers are doing.

  9. O 2023-10-31 13:58

    P. Aich, I say there is also a lasting economic effect from COVID not talked about: people learned to save money; they learned to not go out. There has to be a bit of the depression era mindset that we need to be more cautious with our money because disaster could be right around the corner. I’m not sure the entertainment/theatre/restaurant sectors will ever fully bounce back. On the other hand, we Americans have VERY short memories.

  10. P. Aitch 2023-10-31 14:58

    I see and retain your message, O. As a training exercise Covid was quite formative.
    PS – grudznick – No more poison candy handed out by you this year!

  11. Arlo Blundt 2023-10-31 15:10

    What Governor Noem and others tend to ignore is the huge transfer of wealth from Baby Boomers to Generation Xers who are spending the money on essentials like up scale housing, tricked out Ford Heavy Duties, and exotic vacations. Boomers are also spending their pensions and investment cash in their sunset years on second homes in sunnier climes, a dependable car, and, finally, on congregate housing with medical care. Money is being injected into the economy that has been earned, saved, in their working years. This money putts a pretty strong foundation under the general economy.

  12. Mark B 2023-11-01 02:22

    Also, Boomers didnt have the same crush from technology capitalists manipulating their endorphins since grade school. And if I hear a Bad Parenting response, I will ask you to move to a religious colony or assume you came from one.

  13. John 2023-11-01 04:29

    Did you hear that!?
    That “THUD” Tuesday afternoon was the sound of the price of buying a house simultaneously falling across the US.
    A Kansas City jury unanimously held that the realtors were in a conspiracy to artificially hold real estate commissions high. Real estate commissions in modern western nations are often 1 to 3%. The jury deliberated for barely time for lunch.
    It waits to be be seen whether the judge will issue a national injunction of the ridiculous conspiratorial commissions. And, of course, the sniveling under-worked realtors promise to appeal (throwing good money after bad). If the Missouri court awards treble damages under the state’s anti-trust law, the verdict will exceed $5.3 billion.
    A similar class action case is working its way through federal court in Illinois.
    paywall, but with a worthy analysis and comments:

  14. Donald Pay 2023-11-01 08:52

    Arlo, I’m not sure you can make that general a statement about how boomers are spending their “wealth.” There was a book out a few years ago that espoused that philosophy, but I don’t see many adopting the “Die Broke” method of dumping accumulated wealth before you die. I know a wealthy couple who are doing what you say and most may be spending faster than they did during the pandemic, but they aren’t going hog wild and unloading their savings. The boomers I interact with are fairly conservative with their money because they don’t have a lot of it. Most retired boomers I know worry about running out of money because we live longer than retired folks used to.

  15. John 2023-11-01 10:48

    Biden has a worthy push for the rural American economy.
    “President Joe Biden and administration officials are kicking off an “Investing in Rural America” event series, starting with a visit to a Minnesota farm Wednesday to announce nearly $5 billion for conservation, economic development and “climate smart” agriculture.
    Cabinet secretaries and senior administration officials will be “barnstorming across the country” for the next two weeks, according to the White House. Visits will include stops in Arizona, Georgia, Indiana, Iowa, Kansas, Michigan, New Hampshire, New Mexico, North Carolina, Oregon, Pennsylvania, Washington, Wisconsin and Wyoming.

    In addition to the agriculture dollars, the administration will highlight hundreds of millions for high-speed internet and renewable energy in rural areas.

    The programs are funded by a combination of dollars earmarked under 2022’s Inflation Reduction Act and the Infrastructure Investment and Jobs Act and American Rescue Plan of 2021, laws that Biden points to as milestones of his administration.”

  16. Richard Schriever 2023-11-01 13:33

    O – I have my little toe in the doorway of the investor classroom. My investments do not reflect a “booming” earnings year – at least not over the past 2 months or so. Just sayin’. On the other hand – as far as my employer is concerned, business is booming. Busy busy busy. The metric Cory cites are not about investor success, they are about corporate earnings – busy ness. Investors don’t get their meat until after Xmas. Stock buy-backs look like they are going to be a less to expected ,market value based on earnings. CFOs are flush with cash – to be used to buy out investors (stock holders, who are = lenders.) i.e. pay off debt.

  17. Arlo Blundt 2023-11-01 17:52

    Donald–I would agree with you had I not been visiting Florida in the Winter. I also spend time in a “family resort” area in northern Wisconsin, as I have for 30 years. When working I was very careful about my spending, “Miserly and Controlling” the wife used to say. As I’ve aged the more I’ve let go, influenced by what I see going on around me. I’ve told the adult children “You can have it now, or wait til I kick off, and take what’s left”.

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