President Donald Trump has spent a notable time at this desk, repealing several business-strangling regulations. As a result, the economy is starting to look strong again.
New numbers are out this morning, and if you were counting on an economic boom during the Donald Trump years, then you could be rejoicing.
TheU.S. economy grew three percent in the last quarter (July-September), and that was despite hurricanes causing massive destruction along the southern part of the United States. Via the Associated Press:
The U.S. economy, helped by strong business investment, grew at a solid annual rate of 3 percent in the third quarter. It marks the first time in three years that growth has hit at least 3 percent for two consecutive quarters.
The Commerce Department says the July-September advance in the gross domestic product — the country’s total output of goods and services — followed a 3.1 percent rise in the second quarter. It was the strongest two-quarter showing since back-to-back gains of 4.6 percent and 5.2 percent in the second and third quarters of 2014.
That kind of growth is significant because we’re about to head into the holiday season, which is typically pretty good for the economy, though it’s largely a temporary effect (temporary jobs, seasonal spending, etc.). With a strong headwind going into this holiday season, you could very easily see some of the most impressive holiday numbers since the Bush Administration of the 2000s.
If you look at overall yearly growth in GDP, Obama struggled to meet the economist-recommend three percent growth annually (his highest growth year, 2015, saw just 2.6 percent). And, while the aforementioned 4.6 and 5.2 percent quarters in 2014 were good for Obama, overall that year growth was only at 2.4 percent.
Give Trump credit – deregulation and positivity for the business environment are working. What’s more, as I said just over a year ago, the Fed raising rates was the signal we needed to show confidence in the American business climate.
What raising the rates will do that is infinitely more meaningful is signal faith in business strength in America, which is actually a morale boost that the nation really could use right now. The business environment in America is actually doing pretty okay. We aren’t in another recession, and the odds are that we won’t be hitting another one within the next year. The Fed could very well send a signal stating that they believe this is true, and it could go a long way in making folks a lot more confident in the financial security of our economy.
Growth in investment is the primary reason you lower rates, but it wasn’t happening so the Fed never raised those rates. A combination of a Republican administration and Trump’s hasty deregulation efforts created an atmosphere where the business community felt confident enough to try to make a comeback.
Now, that is possibly going to lead to even more increases in rates as the Fed monitors the situation, which could complicate matters slightly when it comes to tax reform – the state and local tax issue is still one that would cause more people to pay more in taxes, and therefore make them think twice about borrowing.
The bottom line, however, is that the economy is finally looking like it has the strength it needs to get rolling. That would definitely be bad news for Trump critics, and good news for his supporters. Regardless of your political leanings, no one can deny that it is good for America.