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Will America’s economy overheat in 2018?

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USUALLY politicians pretend that good economic news on their watch is no surprise. But America’s recent growth figures have been so positive that even the administration of President Donald Trump has allowed itself to marvel. “It’s actually happening faster than we expected,” mused Mick Mulvaney, the White House budget chief, in September, after growth rose to 3.1% in the second quarter. (Mr Trump in fact came to office promising 4% growth, but the goal now seems to be 3%.) Mr Mulvaney warned that hurricanes would soon bring growth back down. Instead, in the third quarter, it rose to 3.3%—a figure celebrated with more conviction. The administration’s initial caution was wise: quarterly growth figures are volatile, and few economists expect growth above 3% to carry on for long. Yet there is no denying that the economy is in rude health.

In part, that reflects the strength of the global economy. But it is also the culmination of a years-long trend. As politics has consumed…Continue reading



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