OOPS: TRUMP'S "HISTORIC" ECONOMIC GROWTH DOWNGRADED TO "MEH"
The Commerce Department blows up Trump's spot as his trade war drags down GDP and his tax cuts fail to deliver.
In February, the White House issued a press release proudly declaring that "Economic Growth Has Reached 3% for the First Time in More Than a Decade Thanks to President Donald J. Trump's Policies." The brag-sheet claimed that "President Trump's policies of tax cuts, deregulation, and trade reform have generated a booming economy," and shamed the haters ("especially from the previous administration") who "repeatedly denied that the president's policies would lead to this kind of economic growth." A quote from the president proclaimed, "we've accomplished an economic turnaround of historic proportions." Only, as it turns out, that's not what happened at all!
According to revised data from Trump's own Commerce Department, released on Friday, the haters were right and U.S. economic growth did not hit the administration's 2018 goal of 3% growth or higher. While the White House had initially crowed about reaching its target when it thought GDP for the fourth quarter had risen to 3.1%, on Friday that was revised to 2.5%, meaning the economy grew only 2.9% last year. Awkward!
The Commerce Department also said that the economy grew more slowly than previously thought for the second quarter of 2018, at an annual rate of 3.5% rather than 4.2%, largely due to lower exports and weaker investment in structures than expected.
Growth was also slower than previously reported for the fourth quarter of 2018 due to updated figures on consumer spending and business investment. The pace of economic growth was revised to a 1.1% annual rate, or half the 2.2% pace estimated before and the weakest quarterly rate in three years…. The personal saving rate was revised sharply higher for last year, to 7.7% from an earlier estimate of 6.7%, due in part to upward revisions to dividend income.
As the Wall Street Journal notes, the fourth quarter was a rocky time for consumers thanks to, among other things, worry about trade tensions (caused by Trump) and the start of a government shutdown (caused by Trump), in addition to signs of global economic slowdown. The revised numbers also hurt the administration's claims that that a $1.5 trillion tax cut would pay for itself in economic growth.
The downward revisions to the three quarters largely reflected downgrades to business investment, suggesting corporations likely did not plow their tax windfall back into their businesses. Some companies like Apple used their windfall for share buybacks.
It’s almost as though everything the president promised turned out to be wrong!
Bess Levin, Vanity Fair, July 26, 2019
July 27, 2019
Voices4America Post Script. #DerangedDonald is a loser. What is happening to the American economy is on him and his tariffs. The strengths in the economy are from people in states where minimum wage rose and consumers spent again. #Blue2020
According to the Conference of State Legislators: Eighteen states began the new year with higher minimum wages. Eight states (Alaska, Florida, Minnesota, Montana, New Jersey, Ohio, South Dakota and Vermont) automatically increased their rates based on the cost of living, while 10 states (Arizona, Arkansas, California, Colorado, Maine, Massacusetts, Missouri, New York, Rhode Island and Washington) increased their rates due to previously approved legislation or ballot initiatives. Other states that will see rate increases during the 2019 calendar year include D.C., Delaware, Michigan and Oregon.
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