Liontrust's Milburn: Breaking down US growth shows it is not braking too hard

Volatile GDP and government shutdown dominating US

A little over a quarter of a century - OK, a reasonable amount over - ago, when I first started studying economics, we were taught that one of the ways of measuring GDP is by the formula Y = C + I + G + (X - M).

Putting this into words, national income (Y) is the sum of consumption (C), investment (I), government spending (G) and the net effect of exports (X) minus imports (M). I still find that this framework is useful for examining what is driving GDP growth and making predictions about the outlook.  My focus here is on the US economy and the slower, but still decent, approximately 2¼% rate of growth anticipated for 2019 compared to about 3% for 2018. The chart below shows the constituents of real GDP growth - i.e. which factors have been making the economy grow during any particular quarte...