Economic growth under Trump has averaged 2.9 percent, and will likely top 3 percent this year. That’s considerably more than the 1.5-1.75 percent growth rate predicted by the Federal Reserve Bank of San Francisco when Trump took office.
The economy has also added 3.6 million jobs since the start of Trump’s presidency, and unemployment has declined from 4.8 percent to 3.9 percent. Unemployment rates for women, African-Americans and Latinos are all at multi-decade lows. Real disposable income which barely rose during Obama’s tenure is now growing about 0.3 %. And small-business optimism has reached its highest level ever recorded.
On the other hand, it is far too soon for many of the president’s initiatives, such as tax and regulatory cuts, to have fundamentally altered business incentives. Besides, those cuts have been much smaller than the president likes to trumpet. For instance, according to the American Action Forum, net deregulation this year under Trump will save businesses roughly $1.6 billion. This is a step in the right direction but a drop in the bucket of an $18.6 trillion economy.
Rather than a fundamental shift in the economy, we may simply be seeing a "sugar high," the stimulative effect of tax cuts combined with massive increases in deficit spending. Government spending is up 7 percent since last year, and that is reflected in gross domestic product numbers. There is good reason, therefore, to question whether the growth we are seeing is sustainable.
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