According to data released Friday morning by the Bureau of Economic Analysis (BEA), the national economy saw a significant boost in the second quarter, with the initial estimate for quarterly growth in the gross domestic product at 4.1 percent, much higher than 2.2 percent seen in the first quarter of 2018.
President Donald Trump's son, Donald Trump Jr., took to Twitter to share the news. Trump Jr. mocked "the experts who laughed about breaking 3%" and claimed that President Barack Obama, his father's predecessor, never saw such economic growth on his watch.
Trump Jr. is wrong, as it turns out, as several who responded to his tweet pointed out.
Former Florida Governor Jeb Bush also took to Twitter to share the news and praise the president...
...but he was promptly shut down by Philip Bump, a correspondent and analyst for The Washington Post:
Both Bush's and Trump Jr.'s tweets were a response to the president's appearance in the Rose Garden today to share the news:
Moments ago, the numbers for America’s economic growth or GDP were just released and I am thrilled to announce that in the second quarter of this year, the United States economy grew at the amazing rate of 4.1 percent. We’re on track to hit the highest annual average growth rate in over 13 years, and I will say this right now and I will say it strongly, as the trade deals come in one by one, we’re going to go a lot higher than these numbers, and these are great numbers.
The president's comments, however, are rather misleading.
As Philip Bump points out:
President Trump is looking at the annual change in gross domestic product, a figure that hasn’t topped 3 percent since 2005. The Conference Board projected a 3.1 percent annual growth in 2018 earlier this month — but that assumed 4.2 percent growth this quarter. Economists who spoke with The Washington Post, though, think that for a variety of reasons, including the White House’s announced tariffs, economic growth will be slower in the second half of the year.
Trump’s other assertions, about how the country is going to “go a lot higher than these numbers,” are at odds with independent projections. It’s very Trump, though, to keep pledging more and more.
Trump Jr.'s claims fared worse:
On the campaign trail, political observers expressed skepticism about assertions that the country would hit 4 percent growth — annually — not 3 percent in a quarter. Trump Jr., willfully or not, seems to be conflating this quarter’s 4 percent growth with the fact that the economy never grew at a 3 percent annual rate under President Barack Obama. The closest it came was in 2015, when it was at 2.9 percent.
So basically nothing Trump Jr. says is true.
Bump observes that "in the 37 months since Reagan took office in 1981, economic growth has been higher than 4.1 percent in a quarter — including four times under Obama," as the graphs below demonstrate.
Here's quarterly GDP change since Reagan's tenure...
...and here's the number of instances the quarterly GDP change was higher than 4 percent.
Neither of President Trump's or his son's claims about these numbers is all that impressive in context.
Economists project that the 4.1 percent figure will change, as GDP estimates are often revised once more data is collected.
Those numbers tend to trend upward, as the table below, from BEA, lays out.
Jared Bernstein, a senior fellow at the Center on Budget and Policy Priorities and former chief economist to Vice President Joe Biden, says that exports received a boost "from farmers who were selling their agricultural products to our trading partners ahead of the tariffs, and government spending that we put on the national credit card is producing growth as well."
He added: "But the underlying trend closer to 2.5 percent.”
Josh Bivens, director of research at the Economic Policy Institute, concurred with Bernstein that the economic growth seen at this moment is not sustainable for the long haul, telling Newsweek:
Economic growth is determined by the labor force and productivity and no one thinks productivity is going to rise more than 1.5 or 2 percent and no one thinks the labor force can grow faster than 1 percent.
We’ve had six months of growth right around 3 percent. That has happened plenty of times before, and it’s settled back down.
To that, Bernstein said: "Back in 2014 there were a couple of quarters with 4.5 and 5 percent growth. Any quarterly GDP report can be an outlier, you have to average out the dips and pops over the long term to see if there’s a pattern of sustained growth.”
@sama/X
