Legislative Logjam Threatens Early Economic Momentum for Trump
GDP growth jumps to 2.6 percent, but health care failure darkens investment, jobs outlook
Despite sluggish legislative progress on big-ticket agenda items, new numbers suggest the Trump administration has continued to inject confidence into the U.S. economy.
The U.S. economy grew at a rate of 2.6 percent from April 1 to June 30, according to the federal government.
President Donald Trump wants economic growth of at least 3 percent to help drive up revenues, decrease the deficit and create a sustainable recovery that will stimulate wages and job creation.
The news of an encouraging gross domestic product (GDP) was a small bright spot for the White House after the latest failure of Obamacare repeal efforts on Capitol Hill.
After the Great Recession ended in 2009, a long-term and anemic recovery followed. Growth for 2011 was only 1.6 percent; growth in 2016 was also only 1.6 percent.
Former President Barack Obama never had a single year of growth over 3 percent, and he became the first president in the modern era to fail to get even one year of growth at 3 percent or more.
The latest numbers for the second quarter show the “Trump effect” to be real, because much of it is based on consumer spending and business investment. Those are two factors that can be directly influenced by enthusiasm for the priorities of elected leaders.
The first quarter in 2017 was weak: The economy grew only at a 1.2 percent rate.
But Trump’s first full quarter appears to show a confidence in and a heating up of the U.S. economy, beyond the normal trot of the Obama years.
Consumer spending, which accounts for nearly 70 percent of the economy, grew at a 2.8 percent pace, up from a 1.9 percent January-March period, according to The Hill.
There have been 96 months of growth since the Great Recession ended, according to National Public Radio, so the current recovery ranks behind only two others: the one in the 1990s and the one in the 1960s, both boom times.
But this recovery is unusual. Wages have been stagnant. Unemployment was not as low as it should have been. By the end of 2015, The Wall Street Journal reported that 93 percent of U.S. counties had not recovered from the recession based on four key indicators: home prices, the size of the county economy, the unemployment rate, and total employment.
It was a staggering statistic showing how deep and awful the impact of the Great Recession was, but it also showed how little recovery efforts by the Obama administration worked. The news made the political environment ripe for Donald Trump, who often derided the recovery and the lack of jobs and healthy wages.
Trump entered office determined to reinvigorate the jobs market. He approved pipeline projects, prodded employers to expand, and inspired Wall Street trading markets to surge. All of that appears to be working.