The latest federal data confirming a slowdown in U.S. economic growth for three straight quarters, and GDP only reaching the annualized rate of 2.6 percent for 2018 is a slap to the face of president Donald Trump and his Republican Party that boasted of annual growth ranging from 3 percent to 4 percent.
All through the 2016 presidential campaign and since, Trump and the GOP promised economic growth much better than Barack Obama's. That hasn't happened and won't happen in Trumps remaining two years in office since economists agree on U.S. GDP growth this year and in 2020 will be far weaker than 2.6 percent. A recession is also predicted for either 2020 or 2021.
Economist Mark Zandi of Moody's Analytics predicts that "2018 will be the high-water mark for growth in the Trump administration."He expects a mere 1.1 percent growth in 2020, along with a better-than-even chance of recession. And much of the blame for the U.S. economic slowdown can be traced to Trump's trade war on the world.
GDP numbers released by the U.S. Department of Commerce reveal U.S. economic growth sliding for the third straight quarter. Growth stood at 4.2 percent in Q2; 3.4 percent in Q3 and 2.6 percent in Q4.
Analysts blamed the contraction of the global economy for the tepid U.S. economic growth. The good news is the 2.6 percent Q4 GDP is better than the 2.3 percent growth predicted by a panel of economists in a Reuters poll.
Big banks were even more pessimistic about Q4 growth. JPMorgan Chase forecast only a 1.8 percent improvement. Goldman Sachs was even more downbeat with its prediction of a 1.7 percent rise.
Economists estimate the U.S. economy grew some 2.9 percent in 2018, which will the best result since 2015, and better than the 2.2 percent growth in 2017.
The Trump administration estimates economic growth for 2018 at 3 percent. During the presidential campaign, Trump boasted he could boost annual economic growth to 4 percent, goal economists always said was unachievable given the maturity of the U.S. economy.
Economists said the economy failed to achieve the administration's annual growth target for 2018 despite the massive $1.5 trillion in tax cuts and the government spending spree. They agree that growth will only slow from here on in.
"With the tax cut impacts largely done with, it is hard to see how growth can accelerate sharply," said Joel Naroff, chief economist at Naroff Economic Advisors in Pennsylvania. "We are moving back to a sustainable growth pace that we experienced during most of the Obama years."
