It wasn’t long ago that economists were warning that President Trump’s government shutdown — which extended into late January — would wreak havoc on an already struggling economy, especially in the first quarter of the year.
So what are these experts saying now that GDP growth accelerated to a startling 3.2% in the first three months of the year?
Early in the year, anyone following the news was being bombarded with warnings about the economic calamity that the lengthy (partial) government shutdown would cause.
“The government shutdown may have done significantly more damage than was projected at the time,” is how one writer at Seeking Alpha put it.
Politico was clanging the alarm bells even more vigorously. “Across Wall Street, analysts are rushing out warnings that missed federal paychecks, dormant government contractors and shelved corporate stock offerings could push first-quarter growth close to or even below zero if the shutdown, which is wrapping up its fourth week, drags on much longer.”
A Reuters poll of economists found that “U.S. economic growth will take a hit this quarter from the longest-ever government shutdown.”
At the start of the year, Macroeconomic Advisors pegged growth for Q1 at a mere 1.5 percent.
And AP reported in the first week of January that: “Analysts had already expected the economy to slow this year as a boost from tax cuts and increased government spending last year begins to wane. But the longer the shutdown persists, the more it could erode consumer and business confidence, compounding troubles for an economy that was already slowing.”
Scary!
Instead, the economy recorded its highest quarterly growth rate since 2013. Still, the Commerce Department will revised this GDP number twice as more data come in, so it could change — it could go up or down.
But as it stands, over the past four quarters, the economy has grown by more than 2.9%, compared with the previous four quarters.
This is hardly the first time the economy has unexpectedly done better than economists had predicted. Since Trump took office, growth has repeatedly done better than the experts forecast, as his deregulatory efforts and pro-growth tax cuts have turbocharged an economy left moribund by Obamanomics.
So what are these economists saying now? According to the New York Times, this surprisingly high level of growth is exaggerated.
“Economists warned that the report was inflated by short-term factors and probably overstated the underlying pace of growth,” Ben Casselman reported. “Most anticipate a downshift as the year progresses, and hardly any independent economists expect that President Trump will be able to deliver the 3 percent growth he has promised this year.”
Got it? The same folks who were telling us to expect close to zero growth this quarter — and who consistently overpromised growth during the Obama years — are now saying, trust us, the economy will slow soon.
It would be cynical to attribute such erroneous forecasts to political partisanship. But what’s the other choice? That professional economists are as reliable as the local weather forecaster?
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If a Liberal says it “I” don’t believe it BECAUSE a Liberal said it. Liberals ARE known, proven liars, cheats and thieves….. SO…. All of these Liberal’s dire predictions are lies as has been proven. Let any FUTURE dire predictions made by Liberals be viewed with their unbroken string of failures kept in mind……
So called experts who make their money bloviating on topics that they really are not well informed on.
Funny how economists always make “pie in the sky” projections when Democrats are in charge. And always have to explain “unexpected” situations that caused them to fail. And the media will defend it. However, when a Republican is in charge, the estimates are “doom and gloom”. And then tell you how the numbers are lucky circumstances and short lived. And the media will defend it.
Not to mention that economists keep warning about how Trump’s “trade war” with China will slow growth. You can have “free trade” if other nations stick to the rules and you don’t tie your own arm behind your back with overregulation and taxation. Trump prioritized fixing the latter and is working on the former, without much apparent effect on growth.
The experts will be right eventually. A stopped clock is right twice a day.
Yet somehow they keep under-estimating growth when a Republican is President and over-estimating it when it’s a Democrat.
I’ve been around “Experts” my whole professional career and I believe that we are mesmerized by “Expert” worship.
But I like Inigo Montoya’s comment – “…You Keep Using That Word, I Do Not Think It Means What You Think It Means”.
It’s pretty simple. Conservative experts are experts in their field first and foremost. Lefty experts are leftists first, experts second. Expect propoganda. And it’s really more of a uniparty thing when it comes to economics. Main street vs DC/Wall street. The people who were profiting from the old system are terrified that their days are over. They should just relax and rebalance their investments. We are witnessing the greatest economic realignment of our lifetime. Stopping the exfiltration of American wealth. Changing back the perverse incentives that were sending our jobs to other countries. Unleashing American energy. Getting the government boot off the neck of small business owners. That’s what they’re fighting against. Prosperity for all of US, not just them.
Self described “experts”.
Upon the election of Donald J. Trump to the presidency of The United States of America in November of 2016, we were all promised imminent wars, economic depressions, urban riots, and an array of epidemic like diseases.
Two and a half years into the program, the so called experts in our MSM/Hollywood power elite class seem to have been slightly in error with their learned predictions….and so it goes.
They may or may not be wrong in their assessments but they are definitely cheerleading against Trump and American capitalism
yeah, that headline is in no way propaganda.
I’ll use a metaphor you may grasp. When you step on a hose in one quarter (Trump-imposed govt shutdown, and then tak your foot off, there will be a surge. Not a trend and not sustainable, just a shift from the last quarter – where GDP was 2.2% to this quarter where it is 3.2%.
It is like a children’s magic trick, which you have fallen for.
You understand that with the shutdown being Dec 22nd – Jan 25th, the vast majority of it (73%?) was in Q12019, not Q42018. How did a shutdown which lasted for 10% of the days in a quarter cause GDP to drop tremendously in that quarter, but 28% of the days in the next quarter involving a shutdown not negatively impact it? Especially as the actual days in Q42018 are typically pretty dead business-wise because of the holidays involved.
Even taking your hose analogy at complete face value, that would at most shift .2% (10% of the previous growth) forward to the next quarter, still leaving Q1 at 3% growth, while the “experts” cited primarily predicted 0-1% growth.
It happened in the same quarter genius. Just grasping at more leftist straws.
The shutdown was primarily in the first quarter, so the surge would’ve been reflected in the same quarter in which it was held up (i.e. the hose stepped on according to your analogy).
Economic data and empirical observation tend towards conservativism. In a rebuttal to Krugman’s sophomoric article about evidence favoring progressives, its easy to understand why he left economics to become a political hack and columnist for NYT. The fact 1st quarter GDP tends to be weak buttresses the argument that 2.5% to 2.8% GDP growth is sustainable and if you do deficit and budget projections out to a decade, an extra 0.6 to 0.8% makes a huge difference.
Trump has done nothing good for the economy. For the last six years of Obama’s presidency, when the Republicans controlled Congress, they refused to cooperate with him at all. On the budget, this created the “sequester.” As a consequence, restricted government spending was a serious drag on the economy for those six years. After Trump was elected, they opened up the floodgates–not only by lowering taxes, but by also increasing spending. This huge combination fiscal boost fully explains the “booming” economy (also the booming deficit).
Lol, hilariouis
Thank God the Republicans created sequester, and as you say restricted government spending. As it was, Obama rang up $9.3 trillion in deficit spending over 8 years, averaging $1.165 trillion in deficits per.
So far Trump has taken the national debt left to him on Jan 20, 2017 by Obama of $19.947 trillion, added $2.08 trillion in 27 months, making our national debt what it is today of $22.027, or an annual average deficit of $924 billion per year. Check it out, genius.
National debt numbers by our friendly treasury dept at http://www.treasurydirect.gov/NP/debt/current
Go for it Philip Malter
I may not be a genius, but I can read. Here are the deficits by year starting with Bush’s last budget until the sequester:
2009 $1,413 $1,632 9.8% Stimulus Act. Bank bailout cost $250 b. ARRA added $241.9 b.
2010 $1,294 $1,905 8.6% Obama tax cuts / ACA / Simpson-Bowles
2011 $1,300 $1,229 8.3% Debt crisis. Recession and tax cuts reduced revenue.
2012 $1,087 $1,276 6.7% Fiscal cliff
2013 $679 $672 4.0% Sequester / Government shutdown
Bush put this country into a huge hole, which guaranteed huge deficit spending; however, even before the sequester, Obama cut the deficit by more than half. Every recent Democratic president has had to deal with the effects of irresponsible Republican policies which preceded them. Like the Republicans who preceded him Trump again has done nothing good for the economy; but he is increasing the deficit phenomenally.
Suggested reading: https://www.city-journal.org/html/growth-not-equality-15643.html
Regardless whether “trickle down” is valid, Trump has done nothing good for the economy.
But what’s the other choice? The other choice is that economics is not a real academic discipline, It is currently based on modeling that like the global warmers have failed over decades.