As of the second quarter the year over year percent change in real GDP is 2.3%. Virtually everyone refers to this as strong. Why? By historic standards 2.3% real GDP growth is subpar. It is below the long term growth rate of the economy using virtually any widely accepted estimate of trend or potential growth. Many republicans actually claim that the potential growth rate is now 4%. If so, it would only make Trump’s 2%-3% growth look worse.
In 1967, real GDP growth was 2.7%, significantly stronger than the current rate. Yet, that was labeled as a GROWTH RECESSION. In Obama’s second term, after the recession and economic recovery, his economic expansion averaged 2.4% growth, or essentially the same growth Trump has experienced during what is actually the same economic expansion. But Obama’s record was almost universally labeled as weak growth and Trump’s as strong. Trump recently bragged that the economic expansion just passed ten years, to become the longest in US history. But seven and a half years of this was under Obama and only two and a half years have been under Trump. Virtually all the data says that current growth is just a continuation of the trends established under Obama. To date Trumps policies have had essentially no impact on economic growth. In this expansion the strongest q/q SAAR was 5.5% in IV 2014 and the strongest y/y growth was 4.0% in first quarter 2015–both under Obama.
I can understand Trump and the Republican propaganda machine calling 2.4% growth weak and 2.3% growth “THE STRONGEST ON RECORD” as Trump repeatedly does.
But why do we let the media and many economist get away with repeating this republican propaganda. Shouldn’t we be calling them out every time they do this, for practicing such sloppy economics.
Note, all growth rates are rounded to one decimal point. Economist quote two decimal points just to prove they have a sense of humor.