The U.S. isn’t even close to reaching Trump’s economic growth goal
It’s a long way to 4 percent from here.
As a candidate, President Donald J. Trump claimed repeatedly that he could boost U.S. economic growth up to a 4 percent rate.
But the just-released report on U.S. gross domestic product — the broadest measure of the economy — shows the U.S. expanded at a meager 0.7 percent rate in the first three months of 2017.
Consumption, traditionally the driver of the U.S. economy was especially weak, with spending in the first quarter rising at a piddling 0.3 percent rate. That’s largely to do with auto sales. After a years-long surge, car sales are cooling off as lenders who’ve been pretty loose in recent years start to tighten credit. There’s a bunch of reasons why, including rising numbers of people falling behind on payments as well as falling prices for used cars, which reduce the value of the collateral that lenders would get in the case of defaults. On the other hand, investment in U.S. residential housing picked up steam, rising at a 13.7 percent pace.
We’ve said it before and we’ll say it again. Presidents usually don’t have a lot of influence over the direction of an economy as big and complex as that of the U.S. But there seem to be some exceptions. For instance, the Trump administration has been pretty clear that it plans to prioritize the oil and gas industry over environmental concerns, and that seems to have stimulated a surge in drilling investment, after low oil prices hammed the sector over the last few years.
The investment in oil and gas extraction jumped at a 450 percent annual rate during the first quarter. That’s the fastest rise on record, in statistics that date back to the late 1950s.
Cover: U.S. President Donald Trump looks at an executive order during a signing ceremony with Treasury Secretary Steve Mnuchin at the Treasury Department in Washington, U.S., April 21, 2017. REUTERS/Aaron P. Bernstein