Victory Lap for Trump as He Boasts of ‘Amazing’ GDP Number
Even some of the president's critics have to acknowledge that the American economy is booming
President Donald Trump on Friday crowed about the latest economic growth report in typically Trumpian terms, calling it an “amazing rate.”
But with the report from the Bureau of Economic Analysis (BEA) showing that the gross domestic product (GDP) in the second quarter grew at the fastest pace in four years, it’s getting harder for even the president’s critics to dispute it.
The 4.1 percent rate was the best since the third quarter of 2014.
“We’re on track to hit the highest annualized growth rate in over 13 years, and I will say this right now, and I will say it strongly: As the trade deals come in one by one, we’re going to go a lot higher than these numbers,” the president told reporters Friday morning on the South Lawn of the White House. “And these are great numbers.”
Since the economy emerged from the Great Recession in 2009, it has mostly slumped along. It averaged 2.2 percent during former President Barack Obama’s tenure — not including the months it was contracting when he first took office — prompting many experts to declare it the “new normal.”
Those same experts ridiculed Trump’s campaign pledge to boost growth above 3 percent.
Typical among them was Pulitzer Prize-winning columnist Michael Hiltzik, who wrote a piece in May 2017 in the Los Angeles Times under the headline, “If Trump thinks he can get more than 3% economic growth, he’s dreaming.”
Jason Furman, who served as chairman of the Council of Economic Advisers under Obama, wrote in Vox that same month that Trump’s growth projections were unrealistic given the fact that Americans are getting older.
“Optimism that is detached from reality could carry a growing economic price, one that would fall heavily on average American families,” he said.
But Furman, now a professor at the Kennedy School of Government at Harvard University and a senior fellow at the Peterson Institute for International Economics, tweeted Friday that the latest report is strong.
“Big surprise: The underlying data for Q2 is even better than the headline 4.1 percent annual GDP growth rate,” he wrote, noting that consumption was a “very strong 4.0 percent,” while business investment hit 7.3 percent.
Chad Moutray, chief economist at the National Association of Manufacturers, attributed the growth number to tax cuts and regulatory relief.
“More work remains to be done to recruit and train the modern manufacturing workforce of the future, and today’s strong GDP report should only add to the urgency of tackling this important issue,” he said in a statement.
Sen. David Perdue (R-Ga.) said in a statement that the numbers show Trump’s polices are working.
“These efforts are generating much-needed economic growth that is a crucial part of solving our national debt crisis,” he stated.
Not everyone was upbeat. Some advocates found ways to nitpick.
Josh Bivens, director of research at the left-leaning Economic Policy Institute (EPI), wrote that the GDP data combined with the 2.2 percent figure from the first three months of the year point to a trajectory in line with growth that has been typical since the last recession.
“There is little in these six months of data to indicate that American economic growth has moved off the same trend that has characterized most of the post-Great Recession recovery,” he wrote.
The Committee for a Responsible Federal Budget argued that the 4.1 percent figure is based on short-term factors — such as the tax cuts passed last year — that will dissipate.
“Unfortunately, this rapid growth is largely the effect of a one-time sugar high and is not representative of likely growth over the course of the next year, let alone the next decade,” the group said in a statement.
But Trump, flanked by Vice President Mike Pence and his economic advisers, expressed optimism. Friday’s report “isn’t a one-time shot,” he said.
“Once again, we are the economic envy of the world,” he said. “When I meet other leaders, one of the things they say, invariably, is, ‘Mr. President, so nice to meet you. Congratulations on your economy.'”
The president noted that each percentage point in the GDP represents about $3 trillion and 10 million jobs. He said the economy is on track to double in size over 10 years — faster than under Obama or President George W. Bush.
“The trade deficit, very dear to my heart — because we’ve been ripped off by the world — has dropped by more than $50 billion, $52 billion to be exact … We haven’t had a drop like that in a long time,” Trump said.
Kevin Hassett, chairman of the Council of Economic Advisers, said drilling and mining have “skyrocketed in an almost unprecedented way” because of Trump’s energy policies.
“The fact is, if we look at the data today, then we can see the proof in the pudding that the president’s policies are working,” he told reporters. “And it’s not just at the top line, but it’s in the details.”
Added White House economic adviser Larry Kudlow, “This is a boom that will be sustainable, frankly, as far as the eye can see.”