White House Council of Economic Advisers (CEA) Chairman Kevin Hassett demolished claims Tuesday that former President Barack Obama’s eight years in the White House established an unavoidable “new normal” of slow growth, scarce job creation, and burdensome federal regulation.
President Donald Trump was elected by promising to help everyday workers by lowering taxes and reducing bureaucratic regulation to encourage economic growth. Hassett sees the growth under Trump as a rebuke to Obama’s policies.
Obama was elected during the Great Recession of 2008, and he launched a massive $800 billion public spending economic stimulus program in 2009. The economy improved but at an unusually sluggish 2 percent annual pace, which prompted Obama and aides to label the trend the “new normal” because the 3.4 percent annual average since World War II was no longer achievable.
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“One of my favorite ways to just look at how the economy is doing is to look at GDP growth over the previous year. And you might recall, when President Trump ran for office … when he came in, and when I first started at the CEA almost a year ago, that we were looking ahead at 3 percent growth, and everyone said no, we have a new normal,” Hassett told White House reporters during the daily briefing.
Trump has seen steady economic growth but not yet at 3 percent over a year, despite solid indicators and significantly increased confidence in the economy. Obama reached 3 percent annual growth for a few quarters but never for a full year.
“If you look at this chart, you can see a clear trend rate. We went from a ‘new normal’ of low growth to just normal, which is the 3 percent growth Americans used to expect,” Hassett said.
The unemployment rate under Trump has fallen to 3.8 percent, and a slight increase in the labor force participation rate shows people re-entering the workforce after extended time without jobs. Hassett pointed to the historically low unemployment rates for blacks, Hispanics and women as examples of economic progress under Trump.