Two years ago, Trump predicted the Republican tax cut would raise family incomes by $4,000 a year, on average. “It’s going to be fantastic for the economy,” he said at a White House signing ceremony on Dec. 22, 2017. “The numbers will speak.”
The numbers have now spoken, and it’s more like a hiss. Gross domestic product grew a scant 1.9% in the third quarter, signaling a slowdown in the economy since Trump cut taxes. Economic growth under Trump actually peaked at the end of 2017, right before the tax cut went into effect. It came close to that high in the second quarter of 2018, when GDP grew at a 3.5% annualized rate. But growth has been drifting down ever since. The economy grew just 2.9% for the full year in 2018, and it’s on pace for perhaps 2% growth for the full year in 2019. Trump predicted he’d boost GDP growth to at least 3% and possibly 4%.
A brief uptick in growth under Trump is now retreating to Obama-era levels.Trump and his fellow Republicans also predicted a boom in business investment that would trickle down to workers and result in that big wage gain. Again, there was a small bump in investment in the middle of 2018, but this too has fallen sharply. Nonresidential fixed investment, a proxy for business spending, fell 3% in the third quarter. “Real spending on business equipment has slowed sharply,” Ian Shepherdson, chief economist at Pantheon Macroeconomics, explained to clients. “We expect no near-term relief.”
The U.S. manufacturing sector has actually contracted during the last two months. Manufacturing employment has flatlined this year, and anecdotal reports of layoffs suggest a bigger decline could be coming. Overall, the pace of job growth has slowed from an average of 216,000 new jobs per month during President Obama’s second term to 188,000 under Trump, and just 161,000 so far in 2019.
Source:
https://finance.yahoo.com/news/the-trump-tax-cut-stimulus-has-disappeared-184909275.html
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