The president having been in office for over a year at this point means that we can begin to judge the effects of his policies on the economy. He came into office promising to turn the economy around from its supposedly dismal state, prioritizing the concerns of middle-to-lower income Americans in the process.
Has he delivered on those promises? The answer is yes and no, although most of the reason you can say yes is because he inherited an already robust economy. In other words, it’s not that he’s turned the economy around from a massive slump, it’s that he’s — so far — managed to not completely screw it up while also — so far — not making average conditions worse for the American worker. Managing after a year in office to not have blown the economy to smithereens isn’t exactly an accomplishment to be proud of — it’s the bare minimum.
The Commerce Department has now released its first set of numbers measuring GDP growth in the fourth and final quarter of 2017, and the GDP growth rate slowed significantly from the previous quarter. Much of this slowing was the result of an increase in imports, which subtract from GDP.
Trump, of course, has railed against imports, but tariffs only go so far. If, as in the case of the tariffs Trump recently imposed on imported solar panels, we rely upon domestic production for all our needs, that stands to strain the U.S. economy and make prices for relevant goods — like solar panels — spike significantly.
The GDP growth rate measured in the fourth quarter of 2017 was 2.6 percent according to the present numbers, down from a 3.2 percent rate measured in the preceding quarter and also down from a 2.8 percent growth rate measured in the third quarter of 2016, when, of course, President Obama was still in office. The overall estimated GDP growth rate for 2017 was 2.3 percent.
Trump often takes credit for Obama-era economic accomplishments, completely ignoring the fact that although yes, the unemployment rate continues to hit new lows, it began its decline under the Obama administration. The economy didn’t begin when Trump took office.
As for other specific numbers, consumer spending grew at a 3.8 percent rate in the fourth quarter of 2017, which is the fastest rate recorded since 2014. That sharp increase was coupled with a 13.9 percent spike in imports, the highest rate measured since 2010.
In the fourth quarter, 1.13 percentage points were subtracted from the GDP totals because of trade, after trade having added 0.36 percentage points to the totals in the third quarter of 2017.
Economists speaking to Reuters had predicted that GDP would grow at a 3 percent rate in the fourth quarter, meaning that with a 2.6 percent rate, the economy performed somewhat below expectations.
Trump has promised to bring the economy up to a 4 percent growth rate, something that was at one point derided by many analysts for being an outlandish promise.
Even still, during a recent appearance on Fox, Eric Trump acted as though it was a fact that the economy has reached that milestone of 4 percent growth.
That assertion was false; in reality, the Commerce Department hadn’t at the time released any numbers indicating a GDP growth rate of four percent, and they hadn’t even released any numbers covering the fourth quarter of 2017.
What Eric was likely referring to is the running rough estimate of GDP growth maintained by the New York Federal Reserve, which often ends up differing wildly from the Commerce Department numbers and has estimated a near 4 percent growth rate in the fourth quarter of 2017.
At present, the New York Fed’s numbers haven’t been updated since last week.
Trump himself is currently overseas at the World Economic Forum in Davos, Switzerland, where he’s brought his protectionist, isolationist trade policy to a gathering of globalists.
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