May 27, 2020 01:08 AM RSS

Trump Promised Economic Growth Of 5%; He’s Delivering 2.6%

  • Wall Street Rebel | James DiGeorgia
  • 03/04/2019 6:02 PM
Trump Promised Economic Growth Of 5%; He’s Delivering 2.6%

The U.S. Commerce Department reported last Thursday that the U.S. economic growth slowed during the previous three months of 2018 — and warned that more of a slowdown was possible going forward.

By James DiGeorgia

The broadest measure of goods and services produced in the United States — grew at an annual rate 2.6% in the final quarter of last year and slowdown is significant from the middle of the year, when tax cuts and government spending fueled economic growth that grew briefly above 4%.

2019 economic growth in the United States has already started at an even slower pace than the last quarter of 2018 causing many economists to expect economic growth to fall below 2% in the first quarter of 2019. The 35-day partial government shutdown has inflicted the lower growth, and Trump’s trade wars.

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While most economists do not expect a recession in 2019, this means the current economic expansion is still on track to become the longest economic expansion on record.

Lewis Alexander, chief United States economist for Nomura.

“I think this is a slowing, but I don’t think this is ‘we’re falling into an abyss.’”

Kevin Hassett, chairman of Mr. Trump’s Council of Economic Advisers, insisted in an interview on Thursday that President Trump still has some bragging rights — albeit with an asterisk

 “A year of 3.1 percent growth is something many people thought was impossible as recently as 2016, so it’s a major accomplishment.”

Still, Mr. Trump hasn’t delivered the 5% to 6% he promised during his 2016 campaign for the White House, with economic growth in 2018 coming in at 2.9 percent.

Whether growth hits 3 percent might matter politically, but it makes little difference economically. The difference between 2.9 percent and 3 percent growth is negligible in any one year, and, in any case, the Commerce Department will revise its fourth-quarter estimate in March.

Few independent economists agree with the White House expert’s prediction of 3% growth in 2019 and for years into the future. Outside economists expect lower growth and a possible recession in 2020-2021 as a result of the fading effect of tax cuts and spending increases adding $1 Trillion to the U.S. Federal Debt. The Federal Reserve meanwhile expects growth to slow to 2.3 percent in 2019, and many economists are even more pessimistic.

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