Is the U.S. economy slowing under Trump?
President Trump’s economy isn’t bursting out of the gates.
All signs are that it is starting 2017 with more of the same sluggish growth the U.S. experienced during President Obama’s term. But as with the final years of Obama’s presidency, there’s reason to be optimistic about the current state of the economy under Trump.
The government will publish the first report of economic growth in the Trump era on Friday.
The Atlanta Federal Reserve is predicting 0.5% annual growth in the first three months of the year; private economists are forecasting 1.1%.
The Trump administration isn’t really responsible for the slow growth yet. The reason: Many of his policies haven’t become law, and none of them have had enough time to work through the economy.
“What happened in the first quarter of the year is entirely beyond credit or blame of the Trump administration or the 115th Congress,” says Joseph Brusuelas, chief economist at RSM, an accounting firm. “That’ll be a 2018 story.”
Trump’s proposals — from tax cuts to infrastructure spending — likely won’t have an impact on the economy until next year if they get passed through Congress. That’s a big “if,” too.
But Friday’s figure will illustrate Trump’s uphill battle ahead. He’s promised 4% annual growth. The Fed forecasts 2% growth for the next few years.
America’s economic growth has been glacial since the Great Recession ended in 2009, averaging about 2% a year since 2010. During the late 1990s, annual growth hit a strong 4% a year.
Many factors have held down U.S. growth over that time. To name a few: A weak global economy, a strong dollar that hurt U.S. trade, and Americans who have become too hesitant to spend after a scarring recession.
One big difference so far this year is that Americans’ optimism in the economy’s future has improved dramatically. Confidence — from consumers to big business — has shot up, partially because of the hope underpinning Trump’s policies.
But so far there’s no evidence that it’s leading to actual spending. Consumer spending, the real engine of growth, has been sluggish so far this year.
