The US GDP number looks strong in light of several other data points like consumer sentiment and home prices hitting multi-year highs.
But as a consistent observer of Bonddad's economy blog, I feel the more compelling argument about GDP being stuck in low gear is about oil. Oil prices have consistently served as a choke collar on growth over the last few years, capping GDP and throttling down the economy.
Compare these multi-year charts of gas prices and GDP growth. The similarities are stark; when prices move higher, GDP tapers off its growth and turns downward.
Gas prices over the last three years
GDP Growth
Just as GDP growth gets going, or just as gas prices are low, things turn in the opposite direction. I do think that the long term catalyst of prices, besides things we don't know will happen or not, is the strong domestic US oil production story. China slowing down will likely affect the price of oil, but the US oil industry should be affecting market prices significantly. Gas prices, for sustained lower levels, would get out of the way of US GDP growth. Of course,
government spending is likely to play a role as well. But as long as the oil choke collar is engaged, higher gas prices will limit our economy.