The U.S. economy is firing on all cylinders.
Updated numbers from the government now say that in the third quarter, it expanded at an annual rate of 5.2%, 0.3 percentage points higher than previously reported.
This is a fantastic result, of course. And a preview of how the rest of the world is going to look as we are headed into the final chapter of the 18.6-year real estate cycle.
But there is a number in the latest report that caught my attention… and that confirmed my outlook of where the economy is headed next.
It’s All About Real Estate
Yes, consumer spending is strong in the United States. Yesterday, I wrote about the record-breaking Thanksgiving weekend…
However, one of the factors that drove the country’s GDP growth was private investment… in particular, a 6.2% increase in housing investment.
And look at this trend. Housing investment is booming…
In my book, this is great news for the 18.6-year cycle.
Where land (and housing) goes, other assets follow.
This, again, confirms my prediction that we’re not about to see an economic crash anytime soon.
And Now the Fed Has Started Signaling a Pivot
The Fed’s more hawkish members are fine with the current level of interest rates. Christopher Waller, one of the Fed’s governors, said that the 2% annual inflation target can be reached without extra hikes.
Markets took it as a hint that the U.S. central bank is taking a break before it will start cutting rates as the inflation rate declines.
The economy right now is in the “sweet spot,” they say.
I call it the “Eleventh Hour.”
And unknowingly, they help drive the 18.6-year cycle, as they always do.
Financial conditions are going to get easier, credit will be more readily available, asset prices will go up… just look at the amount of housing investment.
Even if the economy slows down a bit (nothing goes up in a straight line), there is so much liquidity and wealth in the system that we aren’t going to see any massive shocks anytime soon.
Note, however, that I’m not making these conclusions based on “incoming data.” That’s what every single “expert” out there does, and they’re wrong all the time.
I’m just looking at what’s been unfolding in the markets in the long term and checking if whatever happens matches what the 18.6-year real estate cycle suggests.
The Trend Continues
So far, “incoming data” has matched my expectations quite well.
I expect this trend to continue.
And I’m not one to normally blow my own trumpet – but heck if I don’t, nobody else will.
I am the only person in the world that forecast U.S. growth rates to go up in 2023… that there’d be no recession… and that housing markets would boom.
What’s more, while mainstream analysts were forecasting recession… my subscribers were staying calm and profiting. Like with M/I Homes (MHO), our 52% winner in less than four months.
Now if you want to see some really interesting material… join my Signal service. We’re gearing up for a few very profitable years.
Regards,
Phil Anderson
Editor, Cycles Trading with Phil Anderson
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