LOOKS LIKE IT’S GOING TO TAKE A LOT MORE THAN RENEWED OPTIMISM TO GROW THE AMERICAN ECONOMY …
So much for all that economic “Trumphoria.” It looks like it’s going to take a lot more than good vibrations to get America’s moribund economy moving again.
According to the latest estimate from the Atlanta Federal Reserve, first quarter gross domestic product (GDP) growth is projected to clock in at an anemic 1.2 percent – which is well below previous projections of 3.3 percent growth.
For those of you keeping score at home, GDP refers to the total value of all goods and services produced in a given country (or state) during a specified time period – in this case the quarter beginning on January 1 and ending on March 31.
Why is the growth rate being downgraded? Well, apparently optimism only goes so far …
“As more and more actual data had to be plugged in, the underlying growth rate continued to get dragged lower and lower,” according to our friends at Zero Hedge.
Not good …
Growth for the fourth quarter of 2016 – former president Barack Obama‘s last full quarter as president – was 1.9 percent. That’s according to the latest estimates from the U.S. Bureau of Economic Analysis (BEA). Annual growth for 2016 was 1.6 percent – making Obama the first American leader since Herbert Hoover not to preside over at least one year in which the economy grew at three percent or better (the BEA began tracking this measure in 1929, the first year of Hoover’s administration).
Talk about some terrible company to keep …
Of interest? The lackluster Q1 projections come as the Federal Reserve is poised to raise interest rates – which could create an additional headwind for future economic expansion.
Our view on all of this is simple: U.S. president Donald Trump was elected in large part because people believed his policies would create expanded economic activity. In fact for Trump to hit his targets, his economic policies have to work.
Of course we’ll never know if they are going to work or not if Republicans in Washington, D.C. refuse to pass them …
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