It is commonly said that a President deserves some credit or blame for the economy’s performance only after he’s been in office about six months. On those terms, let’s measure Trump’s words against the record for real GDP growth over the last three quarters (July 2017 through March 2018). Over those quarters, GDP has grown at an annual rate of 2.6 percent. Comparing that pace to the last nine Presidents over comparable periods in the first terms, Trump here bests the four presidents who faced recessions in their first year in office (Barack Obama, George W. Bush, Ronald Reagan and Richard Nixon). Trump’s other five predecessors came to office, as he did, during economic expansions. Among them, he’s tied for last place: Real GDP growth under Trump over the three quarters has lagged Bill Clinton, Jimmy Carter, Lyndon Johnson and John Kennedy, and tied George H.W. Bush.
Like all of those predecessors, Trump promised to reform regulation and boost business investment, because such measures can stimulate faster growth. Moreover, if the new investments focus on productivity-boosting equipment, they also can help raise people’s incomes. So, Trump devoted much of his first six months in office to rolling back regulations and much of the next months on his single major legislative achievement, sharp reductions in taxes. On overall business investment, Trump’s record again beats the four presidents who faced recessions in their first year in office (Obama, Bush-2, Reagan and Nixon), plus Bush-1)—hardly a heavy lift—and trails his four other predecessors (Clinton, Carter, LBJ and JFK). On investment in equipment, the comparisons are the same except here he trails Obama as well the four other Democratic presidents since 1960.
Trump’s middling record on GDP and investment raises the question of how much longer the current expansion, now almost at its 10th year, can last. Developed economies move in business cycles, and so they weaken eventually as a matter of course. That’s where the United States is today. This late in any economic expansion, the pool of available workers for new jobs is modest, most attractive investment opportunities have been taken, and any pent-up consumer demand for large durable purchases has been exhausted.
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