News Analysis: Trump Owns the Economy Now, for Better or Worse
While Mr. Trump continues to predict robust growth, he is already trying to pin blame for any slowdown on the Fed, rather than any of his own policies.
“We’re doing a good job,” he said in an interview aired Friday morning on Fox Business Network, citing the 3.1 percent gross domestic product figure that will be revised on Thursday. “And I think we have tremendous momentum right now. And you’re right, the world is slowing, but we’re not slowing. And frankly, if we didn’t have somebody that would raise interest rates and do quantitative tightening, we would have been at over 4 instead of a 3.1.”
Fifty-six percent of Americans approve of Mr. Trump’s handling of the economy, Gallup reports, the highest mark of his term and the best for a president since Barack Obama registered the same rating in March 2009. Surveys of consumer confidence remain strong, including a confidence index conducted for The New York Times by the online research firm SurveyMonkey, which has gained strength since Mr. Trump took office.
Unemployment has dipped to 3.8 percent. Inflation remains subdued, and wage growth is accelerating.
White House economists say the tax cuts Mr. Trump signed in 2017, for businesses and individuals, deserve much of the credit for the economy’s performance — and that they will deliver another strong year of investment and hiring in 2019.
“Some folks have said that, ‘Oh, sure, we did have 3 percent growth, but that was a sugar high,’” Kevin Hassett, the chairman of the White House Council of Economic Advisers, said last week.
“And our view is that it’s really not a sugar high at all,” he continued. “A sugar high would be: We spent a lot of money on Twinkies and now we are sorry we ate all those Twinkies, and we don’t have money left. But this is — we actually cut taxes to encourage people to build new factories. And we had new factories last year. We’re going to get more new factories this year, but we’re also going to get the output from the factories we built last year as they turn them on.”
Outside economists are more pessimistic, citing drags on growth from Mr. Trump’s trade policies, slowdowns abroad and a fading consumer spending boost from the tax cuts. Fed officials said this week that their median prediction is now for 2.1 percent growth for the year. Their projections also foresee no interest rate increasesin 2019 — down from a forecast of two in December and in line with Mr. Trump’s desire to halt rate increases — and officials announced they would end the reduction of their asset purchase program sooner than markets had expected.