Donald Trump was pretty excited about Friday’s Q2 GDP release, which showed the U.S. economy expanding at an annualized rate of 4.1% in the April-June period.
So excited was the President that he held a nationally-televised press conference to talk about it, an unusual step, considering, well, considering a lot of things including the fact that it’s somewhat bizarre to gather reporters and advisors in front of the White House to talk about a quarterly GDP print.
There’s a (strong) argument to be made that Trump was trying to distract the country from a series of ominous developments on the legal front, including news that longtime money man and Trump Organization CFO Allen Weisselberg has been subpoenaed to testify before a federal grand jury as part of the Michael Cohen criminal probe and, of course, news about Michael Cohen himself, who is prepared to tell Robert Mueller that the President knew ahead of time about the controversial Trump Tower meeting in 2016.
Of course it’s also possible that Trump was simply trying to reclaim the economic narrative amid a weeks-long backlash against the administration’s protectionist trade policies.
Whatever the case, it was an absurd spectacle which you can watch at the first linked post above (which also contains some analysis), and the bottom line is that while 4.1% is most assuredly a good number, there is absolutely nothing “amazing” about it, despite Trump’s attempts to spin the data as something that stands out historically. Here’s the bottom line:
(Bloomberg)
That is the stone cold, irrefutable reality of this situation, and in case it’s not clear enough from the chart, there is nothing at all anomalous about Friday’s data and considering it likely represents the quarter during which the effects of the tax cuts are likely to be most pronounced, you could easily argue that Q3 is going to be a let down.
But don’t tell any of that to Donald Trump Jr., who tweeted this on Friday:
As usual (and at this point, you have to think it’s intentional because by now, every economist in America has pleaded with the Trump family to try and wrap their heads around the difference between quarterly and annual figures), there’s room for interpretation there, but taken at face value, Don Jr. is lying to 3 million people.
There were multiple quarters during the Obama years when the economy expanded at a 2% rate or higher and in fact, there were four quarters under Obama when growth was 4% or higher.
(The Washington Post)
As you can see from that chart (and there is nothing at all unique about that visual other than the red and blue shading – that is, those just are the numbers, so this isn’t some kind of WaPo, anti-Trump spin job), there were four quarters under Obama that were better than Q2 2018, a quarter Trump claims was so incredible that it deserved to have its own, dedicated press conference.
Here, just to drive the point home, is the reality of Q2 2018 in context:
strong 4.1% growth under Trump in Q2 of 2018 would rank as 5th strongest Q of Obama presidency
—5.1% Q2 2014
—4.9% Q3 2014
—4.7% Q4 2011
—4.5% Q4 2009— John Harwood (@JohnJHarwood) July 27, 2018
Of course the ultimately irony in all of this is that if you watch the press conference, Trump tries to attribute the (relatively) strong growth to his tariffs, and yes, those would be the exact same tariffs that have caused some American companies to predict weaker profit growth going forward.
This week alone, General Motors, Harley-Davidson, Whirlpool and a handful of other companies explicitly cited the tariffs on the way to explaining either earnings misses, guidance cuts or in some cases both.
Trump went to great lengths in Friday’s celebratory presser to insist that the numbers are sustainable. Economists disagree. Here’s WaPo:
Economists who spoke with The Washington Post, though, think that for a variety of reasons, including the White House’s announced tariffs, economic growth will be slower in the second half of the year.
But it won’t matter, because when those predictions are borne out, Trump with either blame someone else or ignore the numbers altogether.
One thing’s for sure, you won’t see any press conferences in front of the White House to explain things in the third and fourth quarter if things go off the rails.
The fruit does’t fall far from the tree. Or. like father like son. Even better this whole family are the sleaziest, most unethical scumbags ever.
As usual father and son are alike, never in the history of politics has there ever been bigger liars than the pres and son.
Trump is correct that the tariffs impacted the GDP. It forced companies to push forward their buying to build up inventories before tariffs took effect.
4.1% is just the first revision, which is historically unreliable as not all the data is in. The second revision next month should be far more accurate. It’ll be interesting to see if the financial journos pay attention to it.
I had always found it difficult to accept that being a douchebag was hereditary, i.e., able to be passed on from parents to their offspring. However, in the case of Destructo and Jr., there is now strong evidence that a douchebag, like Jr., can in fact be that way as a result of having had a father who was is a double-certified douchebag.