President Trump boasted in December 2017 that the economy could grow at 4%, 5% or maybe even 6% when he was President. The economy did well in that quarter, growing at 3.5% on an annualized basis. Unfortunately, that was essentially a peak for his Presidency. Except for growth of 3.5% in the June 2018 quarter (more than likely due to the tax cut sugar rush), there has only been one other quarter since then that has had over 3% growth (3.1% in the March 2019 quarter), and growth has been at 2% or less the past two quarters.
The December 2018 quarter had Trump’s weakest GDP growth of 1.1% with almost all of the growth coming from consumer spending (0.97% or 97 basis points of the 110 total). Business spending added 53 basis points or 0.53% to the growth rate, but this was offset by a negative 35 basis points’ impact from trade and 7 basis points from government spending. And over the past two quarters business spending has been a drag on the economy with few signs that it is improving.
If this year’s December quarter comes anywhere close to the 0.4% that the Atlanta Fed is projecting or the 0.7% from the New York Fed, it would be by far the lowest growth of Trump’s Presidency.
While consumer spending is strong, the trend is downward
The Census Bureau released its Advance Retail Sales estimate for October in mid-November. The three-month change on an annualized basis was 4.2%; however, this is a drop from 5.7% in September and more than a 50% decline from 9.4% in May this year. The graph below from Guy LeBas at Janney shows the results over the past six months.
Read More: https://www.forbes.com/sites/chuckjones/2019/11/26/trumps-economy-is-on-the-cusp-of-negative-growth/#1fb479f43be9