Trump’s twitter fingers will get more exercise, thanks to the Commerce Department. The Commerce Department’s second-quarter estimate of gross domestic product growth is 3.0 percent. That’s better than some economists predicted. The consensus was Q2 results would be 2.7 percent, thanks to strong consumer spending. The first-quarter 1.2 percent figure was a disappointment, and the second-quarter percentage is a celebration. In order to hit Trump’s 3.0 percent growth figure for 2017, gross domestic product growth will have to stay at 3.0 percent or better in the third and fourth quarters, according to economists. Steven Mnuchin, Trump’s Treasury Secretary thinks it may take two years before the economy can sustain 3.0 percent gross domestic product growth.
Mr. Mnuchin thinks the technology sector is not producing the same kind of growth they had before the 2008 Great Recession. According to associate professor of economics at NYU’s Stern School of Business, Gian Luca Clementi, Trump’s policies are bad news for the economy. Business owners spent more after the election, but now that the presidential novice is shaking up the Congressional bag, and turning the political atmosphere in Washington into a three-ring circus, the 3.0 percent growth figure may be a dream.
The good news is, consumer spending hit 3.3 percent in the second-quarter, thanks to prescription drugs, cell phone services, housing, and utilities. But that percentage is going to be hard to maintain in the last half of the year. There’s too much mud in the economic and political water to hit Trump’s target, according to many economists.
Even though Trump will sing the praises of his good decision making, three percent growth is weak growth when China and India are part of an economic growth conversation. China GDP growth is more than 6.7 percent and India’s GDP growth is higher than that. Trump may be happy, but on the world’s economic playing field, U.S. GDP growth is not good.
Hurricane Harvey will also create issues that impact economic growth in the third quarter of 2017. Economists are not sure how much Harvey will impact the economy. But with oil refinery’s out of service, and a cost estimate of $40 billion to clean up the mess, it’s doubtful the economy will continue to show progress in the last half of the year. But President Trump will take advantage of the 3.0 percent growth figure now and avoid answering questions about GDP growth in the third and fourth quarters.