24 PalletCentral • September-October 2018 palletcentral.com
Economy Gains Momentum
During the first half of 2018 the U.S. economy gained momen-
tum. Growth was already doing well in 2017, but the Trump tax
cut added some additional fuel. Overall economic growth (as
measured by Gross Domestic Product – GDP) is now running
about 3% above year ago levels. Consumer spending continued
to grow at the same rate as the last few years, a bit below 3%.
The big boost came from business investment which has improved
significantly, in part due to the cut in corporate profits tax and a
rebound in oil prices (the number of oil rigs surged again). Overall
government spending improved as well and is now growing above
1%. Residential and net exports have been relatively flat this year.
GDP
The stronger economic growth boosted industrial production,
which is the important macro-economic proxy for pallet demand.
Industrial production (manufacturing only) was running about
3% above year ago levels in July. This is the strongest growth since
2012. The growth in 2012 is a little misleading however, since
it was merely the rebound from a very deep hole after the
Great Recession in 2009-10.
Emerging Challenge:
ECONOMY
By Lynn Michaelis
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