2020 3rd Quarter Economic Update

I’m on the board of the local chamber of commerce and most chamber members believe
the economy is booming. This sentiment is also echoed by cable news channels and
politicians on both sides. Lately, there is talk not only in the financial media, but in all
media of the potential for a recession.
In this Update Part I, I will try and answer the question – is the economy booming? In
Part II (to be issued next month) I try to answer the question - are we headed for a
recession? Answering the question of a booming economy is easier to answer because I
look at current economic data points.
The U.S. trade wars are slowing the global economy, and the slowing economy is
impacting certain parts of our economy. Can the U.S. economy escape the global

The economy did get a boost in late 2017 and early 2018 thanks to the anticipation of a
new business friendly administration with tax cuts and the lowering of regulations and
increased military spending. From the GDP chart above, So far this year, the economy is
growing about 2.5%, not a booming economy. Earlier in the economic cycle, there were
a few quarters where the economy was stronger than current growth but it was not

The chart shows how the law of large numbers works, as the economy grows from around
$2 trillion in the 1950s to over $20 trillion today, economic growth slows as the economy
gets much bigger. The 1980s boomed thanks to the large baby boomer population including
women and minorities who were all joining the work force, establishing families, buying
homes and cars. The 1990s boomed and had several years of close to 5% growth thanks to
the digital revolution including the internet, and major advances in software and hardware.
The current cycle does not have a major catalyst d