It took just over three months, but Donald Trump is tanking the economy. According to Atlanta’s Federal Reserve, the anticipated growth for Donald Trump’s first quarter has ground to a near halt – at close to zero.
Atlanta Fed Throws In The Towel: Cuts Final Q1 GDP Forecast To Just 0.2% https://t.co/RPTKxxaOns
— zerohedge (@zerohedge) April 27, 2017
While the official numbers aren’t in yet, the numbers from the Commerce Department are due on Friday and are likely to mirror, or at least close to mirror, Atlanta’s.
The Atlanta Fed’s widely followed GDPNow tracker, which aggregates model forecasts for several subcomponents of GDP like exports and homebuilding, fell to an all-time low of 0.2% for the first quarter.
Economists surveyed by Bloomberg are more optimistic, forecasting that gross domestic product increased at an annual rate of 1%.
In a post on Thursday, the Atlanta Fed said its model fell from 0.5% after Wednesday’s annual retail trade revision dimmed the outlook for consumer spending in the first quarter. Spending is the biggest contributor to economic growth.
Source: CNBC
While it’s too soon to “blame” Trump’s policies, if we can ever figure out what those might be, consumers don’t seem to have much faith in the fledgling administration. Spending is down, way down. It’s the weakest it’s been since the depths of the Great Bush Resession in 2009. It’s also the lowest it’s been since then.
While on the campaign trail, Trump consistently promised a growth of 4% GDP, which, like nearly all his promises, is pure fantasy. Still, the promise exists:
“To get the economy back on track, President Trump has outlined a bold plan to create 25 million new American jobs in the next decade and return to 4 percent annual economic growth,” reads the White House site.
Source: Business Insider
Ain’t gonna happen:
Currently, the US is stuck in a slow growth pattern since the financial crisis and has been unable to escape the 1.5% to 2.5% annual growth corridor over the past seven years. This is lower than the 3.1% percent average annual GDP growth we’ve been experiencing since 1950.
While we can’t point fingers at any Trump policies, simply because the entirely Republican government hasn’t passed any bills, the housing market is very unhappy with Trump’s executive order that added a 20 percent tariff to Canadian lumber, which will have a huge snowball effect on jobs and and home sales.
We aren’t in a recession yet, but if Trump continues the “success” he’s experienced so far, that may be next.
Featured image via Pool/Getty Images.
