The White House

REMARKS BY PRESIDENT TRUMP ON THE ECONOMY

South Lawn

July 27, 2018

9:43 A.M. EDT
 
     THE PRESIDENT:  Good morning.  Moments ago, the numbers for America’s economic growth -- or GDP -- were just released.  And I am thrilled to announce that, in the second quarter of this year, the United States economy grew at the amazing rate of 4.1 percent.  We’re on track to hit the highest annual average growth rate in over 13 years.  And I will say this right now, and I’ll say it strongly: As the trade deals come in one by one, we’re going to go a lot higher than these numbers.  And these are great numbers. 
 
During each of the two previous administrations, we averaged just over 1.8 percent GDP growth.  By contrast, we are now on track to hit an average GDP annual growth of over 3 percent, and it could be substantially over 3 percent.  Each point, by the way, means approximately $3 trillion and 10 million jobs.  Think of that.  Each point -- you go up one point -- that doesn’t sound like much; it’s a lot.  It’s $3 trillion and it’s 10 million jobs. 
 
If economic growth continues at this pace, the United States economy will double in size more than 10 years faster than it would have under either President Bush or President Obama.
 
Perhaps one of the biggest wins in the report, and it is indeed a big one, is that the trade deficit -- very dear to my heart, because we’ve been ripped off by the world -- has dropped by more than $50 billion.  $52 billion, to be exact.  It’s dropped by more than fifty.  Think of that.  The trade deficit has dropped by more than $50 billion.  And that’s added -- and adding -- one point to GDP.  That’s a tremendous drop.  We haven’t had a drop like that in long time.  You’ll have to go back a long time before you find it. 
 
By increasing growth to 3 percent over the next 10 years, that would mean 12 million new American jobs and $10 trillion of new American wealth, at least.  And that’s not including the fact that, since I was elected, we’ve created approximately $7 trillion of new wealth. 
 
The year before I came into office, private business investment grew at only 1.8 percent.  Last year, it jumped to 6.3 percent.  That was my first full year; we had to do a lot of things to get it to grow.  And this year, it’s growing at 9.4 percent.  So that’s a very tremendous increase.  There hasn’t been an increase like that in many, many years -- decades. 
 
And I think the most important thing -- and Larry Kudlow just confirmed to me, along with Kevin Hassett -- that these numbers are very, very sustainable.  This isn’t a one-time shot.  I happen to think we’re going to do extraordinarily well in our next report, next quarter.  I think it’s going to be outstanding.  I won’t go too strong, because then if it’s not quite as good, you’ll not let me forget it.  But I think the numbers are going to be outstanding. 
 
We’ve accomplished an economic turnaround of historic proportions.  When I came into office, 1.5 million fewer prime-age Americans were working than eight years before.  We had lost almost 200,000 manufacturing jobs under the previous administration.  And you all know, they say, “Well, you have to lose manufacturing jobs.  It will get worse and worse.  Manufacturing jobs are obsolete.”  No, they’re not obsolete; they’re the greatest jobs we have. 
 
More than 10 million additional Americans had been added to food stamps, past years.  But we’ve turned it all around.  Once again, we are the economic envy of the entire world.  When I meet the leaders of countries, the first thing they say invariably is, “Mr. President, so nice to meet you.  Congratulations on your economy.  You’re leading the entire world.”  They say it almost each and every time. 
 
America is being respected again, and America is winning again, because we are finally putting America first.
Everywhere we look, we are seeing the effects of the American economic miracle.  We have added 3.7 million new jobs since the election -- a number that is unthinkable, if you go back to the campaign.  Nobody would have said it, nobody would have even, in an optimistic way, projected it. 
 
We are in the midst of the longest positive job-growth streak in history.  New unemployment claims have recently achieved their lowest level in almost half a century.  The African American unemployment rate has achieved the lowest level in recorded history.  African American unemployment is the best it’s ever been in the history of our country.  The Hispanic unemployment rate has reached the lowest level, likewise, in history.  The Asian unemployment rate has recently reached the lowest level, again likewise, in history.  Women unemployment rate recently reached the lowest level in 65 years.  And soon that will be in history.  Give it another two or three weeks.
 
Veterans' unemployment is at its lowest level in 18 years.  And that number is rapidly going up, on top of which we just received and won from Congress, Choice, where veterans can go out and see a doctor if they can’t get service, the service that they deserve. 
 
Unemployment for disabled Americans has hit a record low.  Lowest in history.  More than 3.5 million Americans have been lifted off food stamps -- something that you haven’t seen in decades.  3.5 million Americans have been lifted off food stamps.  That’s because they’re able to go out and get a job.  And they’re going to love their jobs. 
 
Ninety-five percent of American manufacturers are optimistic about their company’s outlook.  And that’s the highest level, also, in history.  And that’s an old survey.  Been around a long time. 
 
Manufacturing wages are expected to rise at the fastest rate in over 17 years.  Business and consumer confidence has reached historic highs.
 
So far this year, American exports are up nearly 20 percent.  I’ve only been here a little more than a year and a half.  Over the same period, in the year before I took office, we’ve become a net exporter of natural gas for the first time since 1957.  We’ve gotten rid of tremendous amounts of regulations, which allows us to do things.  And we still have tremendous regulations on clean air, clean water, the environment.  It’s very important to me, very important to everybody.  But we had unnecessary regulations that were hurting our economy and hurting our country. 
 
We have eliminated a record number of job-killing regulations.  And with the help of Republicans in Congress, we passed -- without one Democrat vote -- the biggest tax cuts and reform in our history.  And, as you know, the Democrats want to end that and raise everybody’s taxes.  That will be a disaster for our economy. 
 
As a result, more than 6 million Americans are now enjoying new bonuses, better jobs, and far bigger paychecks.  Yet every single Democrat voted against the tax cuts -- every single one; we didn’t get one vote.  They voted against working families, they voted against small businesses.  Not good.
 
In the first three months after tax cuts, over $300 billion poured back into the United States from overseas.  We think it’s going to be, in the end, when completed, over $4 trillion will be back into our country.  Apple alone is bringing in $230 billion.  And they’re building new plants.  They’re building a magnificent campus.  They’re going to be spending their money very wisely, but they’re spending it in our country, not in some other country.  That was made possible by the new tax cut and reform plan. 
 
At the same time, we are finally cracking down on decades of abusive foreign trade practice.  We were abused by companies.  We were abused by the companies within countries.  But in particular, we were abused by countries themselves, including allies.  Abused like no nation has ever been abused on trade before.  Because we had nobody watching.  They stole our jobs and they plundered our wealth.  But that ended. 
 
Yesterday, I was at Granite City Steel in Illinois.  It was an incredible sight.  We had an audience of steel workers, some of the roughest, toughest people you’ve ever seen.  And half of them had tears coming down their face.  I don’t know if these people ever cried before in their life, to be honest.  Half of them had tears coming down because we opened a tremendous United States Steel plant.  They’re opening up seven other plants.  And the steel industry is back.  They’re open for business.  And we need the steel industry.  And the tariffs did it. 
 
And nobody mentions the fact that these plants are creating tremendous numbers of jobs -- tremendous.  And billions of dollars are pouring into the United States coffers.  Billions of dollars.  But we're getting jobs.  We're getting money coming in.  We're respected.  And, eventually, the steel prices will really start to go down, because all of these new plants are going to be competing against each other.  But we won't have foreign countries dumping -- that's the word they use, "dumping" -- steel all over the place and destroying our factories, destroying our plants, destroying our companies, and destroying our jobs.
 
Since I was elected, we’ve added 400,000 new manufacturing jobs.  Remember, that was the obsolete deal.  Obsolete.  I used to say, "Why is it obsolete?  We have to make things."  Manufacturing jobs are among our best jobs -- and we're just getting started.
 
We've also liberated millions of Americans from the crushing burdens of Obamacare.  The cruel individual mandate penalty is gone.  That's where you pay a lot of money for the privilege of not having to buy bad healthcare and pay for it.  It's gone.  Nobody thought we could get rid of it.  That was the most unpopular provision, by far, probably on anything, but certainly in Obamacare.  And Obamacare is now on its last legs, fortunately.
 
And through Associated Health Plans, we're giving Americans the ability -- just opened -- millions of people going to be signing up.  Millions and millions.  We're giving Americans the ability to join together to purchase much better and more affordable healthcare and health insurance, including bidding across state lines.  So all of the insurance companies are going wild.  They want to get it.  You're going to have great healthcare at a much lower price.  It will cost the United States nothing.  Nothing.  Think of that.  Will cost us nothing.  And that's Secretary Acosta -- Secretary Azar is coming out with another healthcare plan somewhat different.  Result the same.  Much less expensive healthcare at a much lower price.  It will cost our country nothing.  We're finally taking care of our people. 
 
Finally, there's another matter that's of profound importance to me.  And I wish to discuss it right now, before we leave, because there's nothing like what we've been working on.  So important for the lives of not only Americans, but lives all over the world.
 
At this moment, a plane is carrying the remains of some great fallen heroes from America, back from the Korean War.  They're coming back to the United States.  Mike Pence, our wonderful Vice President, will be there to greet the families and the remains.  And I want to thank Chairman Kim for keeping his word.  We have many others coming.  But I want to thank Chairman Kim in front of the media for fulfilling a promise that he made to me.  And I'm sure that he will continue to fulfill that promise as they search and search and search. 
 
These incredible American heroes will soon lay at rest on sacred American soil.  Even during the campaign, people would come up to me -- it's a long time ago -- many decades ago.  Oftentimes they were older.  In some cases, they were younger.  Great-grandfathers.  My great-grandfather, my grandfather, my father -- they asked if I could do something about it.  I'd look at them, I'd say, "We don’t get along too well with that country."  They said, "Whatever you can do."  And it's something that was very important to me.  Many people have asked that. 
 
I've asked the Vice President and others to just pay a special tribute -- and they will do that.  So we honor the sacred memory of every incredible American patriot who fought and died in that war. 
 
In everything we do, in every action we take, we are fighting for loyal, hardworking, patriotic citizens of our blessed nation.  We're making our country great again.  We're respected again all over the world.  Our military will soon be stronger than it's ever been, by far.  That in itself will produce thousands and thousands of jobs.  Nobody makes equipment like we do -- nobody -- whether it's planes or missiles, or any form of military equipment.  We make the best in the world, by far. 
 
We're making it possible for our allies to buy that equipment quickly, where they don’t have to wait for two-year approvals, and more.  We're doing great.  And I'm very honored to see that 4.1 number.  Perhaps I'm even more honored to see that deficit shrink -- the trade deficit shrink so much.
 
With that, I'd like to ask Kevin Hassett, Chairman of the Council of Economic Advisers, and my very good friend, Larry Kudlow, if they could both step forward and say a few words. 
 
Thank you all very much.  It's a great day.  (Applause.)
 
MR. HASSETT:  Thank you very much, Mr. President.  And thank you for your leadership and for the faith that you put in me when you offered me this job.  And thank you for standing up for our veterans.  My father and my uncle both fought in the Korean War, and you just can't imagine how much it means to those veterans that you didn’t forget their comrades.
 
You know, as an economist, it's my duty, sir, to remind that we should not make too much of one number, right?  How often do we hear economists say that?  But when I think back to the first time I met with you in the Oval, and we talked about your vision about how to make America great again, you might recall that, in the end, I agreed, yeah, that stuff really ought to work.
 
And the fact is that if we look at the data today, that we can see the proof of the pudding that the President's policies are working.  And it's not just in the top line, but it's in the details. 
 
So the President said that if we deregulate the economy and have a tax reform, that there will be a capital spending boom because the factories will come back to America.  If you look at the data, then the factories are booming again. 
 
The President said that if we emphasize energy production here in the U.S., that we could become a dominant energy economy, even an energy exporter.  Well, if you look at the data today, one of the reasons why the data is so strong is that drilling and mining activities skyrocketed in an almost unprecedented way.
 
And finally -- and this is the thing that at times, sir, you've kind of looked at me and smiled about whether I really agree with you.  You said that you would bring the trade deficit down -- and you have.  The $50 billion reduction in the trade deficit proves that if you stand up for America's workers and let our allies know that deals that aren’t reciprocal are unacceptable, that you can make a lot of progress.
 
And so thank you very much for your leadership, sir, and for your faith in me.  Thank you.
 
THE PRESIDENT:  Thank you, Kevin.  Great job.  Thank you.  (Applause.) 
 
MR. KUDLOW:  Thank you, sir.  Thank you, sir.  It's a little warm out here, so I'll be as quick as I can.  I want to reiterate what the President said and my pal, Kevin Hassett. 
 
Look, we've had a pro-growth agenda.  It has been in place for a short while.  It is already beginning to work.  Low tax rates.  Rollback of regulations.  Unleashing energy.  And trade reform to fix a broken world trading system.
 
I just want to note in the numbers -- and this is becoming a trend -- business investment is booming.  Nine to ten percent growth in the first half of this year.  I believe that's going to continue.  Why do I talk about business investment?  Well, that's the key to productivity, which is the key to growth, which is the key to rising real wages and very strong jobs. 
 
A point that Kevin and I made during the campaign a million times and we continue to make it: These tax cuts, particularly on the business and investment side, are going to be boosting wages, livelihoods, and jobs, for middle-American, ordinary, working folks.  And it's starting to take effect.
 
And that's why I agree with the President, this is a boom that will be sustainable.  Frankly, as far as the eye can see, this is no one-shot effort. 
 
So that's me.  Thank you, sir.  Appreciate it very much.
 
THE PRESIDENT:  Thank you, Larry.  (Applause.)  Thank you very much, everybody.  Thank you.
 
                        END                10:03 A.M. EDT
Republican National Committee

Trump’s GDP Triumph

Touted As A “Referendum” On GOP Tax Cuts, Second Quarter GDP Comes In Booming At Over 4%

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TOP TAKEAWAYS

·         The economy grew an impressive 4.1% in the second quarter of 2018, soundly beating most economists’ predictions.

o   After years of stagnant growth under President Obama, many so-called experts and Democrats scoffed at the idea that President Trump’s economic agenda could generate over 3% GDP growth.

·         Today’s GDP report showed “booming” economic growth in the second quarter of 2018.

·         The report was “widely seen as a referendum on the GOP tax cuts of late 2017.”

o   The GOP tax cuts provided “a lift to disposable income” driving consumer spending which makes up about 70% of GDP growth.

·         Strong GDP growth is critical to the economic success of everyday Americans as it directly impacts standard of living, and increases tax revenues without harmful tax hikes.

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THE TRUMP ECONOMY CONTINUES TO FIRE ON ALL CYLINDERS AS SECOND QUARTER GDP SOARED TO 4.1%

GDP Grew 4.1 Percent In The Second Quarter Of 2018

GDP Increased At An Annual Rate Of 4.1 Percent In The Second Quarter Of 2018. “Real gross domestic product increased at an annual rate of 4.1 percent in the second quarter of 2018 (table 1), according to the "advance" estimate released by the Bureau of Economic Analysis. In the first quarter, real GDP increased 2.2 percent (revised).” (Gross Domestic Product, Bureau of Economic Analysis, 2/28/18)

The Second Quarter GDP Number Was The First To Be Impacted By The GOP Tax Cuts

The Second Quarter GDP Report Was “Widely Seen As A Referendum On The GOP Tax Cuts Of Late 2017.” “The second-quarter figure will be widely seen as a referendum on the GOP tax cuts of late 2017. This quarter benefits from a timing sweet spot, coming after the deficit-busting cuts trickled through the economy, but before the effects of the White House's protectionist trade policies are fully felt.” (Irina Ivanova, “U.S. Second-Quarter GDP Growth Expected To Top 4%,” CBS News, 7/26/18)

The Second Quarter GDP Report Is “Highly Anticipated” And Expected To Be Boosted By The Tax Cuts And Jobs Act. “President Trump is eager to tout a fast-growing economy, boosted by the tax cuts he pushed through Congress. That makes Friday morning's report on gross domestic product a highly anticipated news event.” (Jim Zarroli, “How Fast Did The Economy Grow? Forecasts Are All Over The Place,” NPR, 7/26/18)

After Years Of Stagnant Growth Under President Obama, Democrats And So-Called Experts Laughed At President Trump When He Claimed His Economic Policies Could Lead To 3% Growth

During President Obama’s Two Terms In Office, The Economy Grew At An Average Rate Of 1.5 Percent—The “Worst Recovery Since The Great Depression.” “The economy grew at just a 1.5 percent pace during President Barack Obama's two terms that began in 2009 as the Great Recession was ending. His second term in office saw GDP average 2.1 percent a year, but overall Obama presided over the worst recovery since the Great Depression.” (Jeff Cox, “Trump's Hope For 3% Growth No Longer Looks So Far-Fetched,” CNBC, 8/30/17)

When President Donald Trump Predicted 3 Percent Economic Growth “A Lot Of Economists Didn't Take Him Seriously.” “When President Donald Trump predicted that his policies would spur growth of 3 percent or more, a lot of economists didn't take him seriously. They may now.” (Jeff Cox, “Trump's Hope For 3% Growth No Longer Looks So Far-Fetched,” CNBC, 8/30/17)

·         When President Trump’s Preliminary Budget Forecasted 3 Percent Economic Growth Director Of President Obama’s National Economic Council, Larry Summers, Said That The Prediction Was “Fair Enough If You Believe In Tooth-Fairies.”   “Apparently, the budget forecasts that US growth will rise to 3.0 percent because of the Administration's policies-largely its tax cuts and perhaps also its regulatory policies. Fair enough if you believe in tooth-fairies and ludicrous supply-side economics.” (Larry Summers, Op-Ed, Trump Created A Budget With Such An Egregious Error He Would Fail An Economics Course,” CNBC, 5/23/17)

California Governor Jerry Brown (D-CA) Stated That President Trump’s Budget Is Based On The “Utterly Bogus” Economic Assumption Of Sustained Economic Growth Of 3% Or Higher. “‘This budget proposal is based on utterly bogus economic assumptions,” said California Gov. Jerry Brown, a Democrat. ‘It gives a massive tax break to the wealthiest while imposing painful and debilitating burdens on tens of millions of decent and hardworking people. It's unconscionable and un-American.’ The budget balancing depends on a sustained 3 percent economic growth rate, which many economists consider unrealistic. Many of Trump’s cuts affecting California, moreover, resurrect previous presidential efforts that evaporated in the face of bipartisan congressional resistance. If anything, the proposed cuts serve mainly as a reminder of the federal government’s vast reach.” (Michael Doyle and Sean Cockerham, “California Takes Many Hits, Large And Small, In Trump’s 2018 Budget Proposal,” The Sacramento Bee, 5/24/17)

Rep. Ted Lieu (D-CA) Shared A Vox Articled That Called President Trumps Economic Growth Assumptions “Wildly Optimistic.” (Rep. Ted Lieu, Twitter Feed , 5/23/17)

Marc Goldwein, Senior Policy Director At The Bipartisan Center For A Responsible Federal Budget Called 3% Growth “Unrealistic.” “In February, the president told Fox News that his $54 billion defense budget would be paid for by a ‘revved-up economy,’ and that 3 percent growth would represent ‘a whole different ball game.’ Treasury Secretary Steve Mnuchin stuck to that statistic in his testimony yesterday before the Senate. But the number is unrealistic, said Marc Goldwein, senior policy director at the bipartisan CRFB, in a press briefing. A more credible number is just south of 2 percent, more than a percentage point below the 3.2 percent average annual rate the U.S. has enjoyed since 1950.” (Leigh Buchanan, “Report: 3 Percent U.S. GDP Growth Rate Is Unrealistic,” Inc.com, 5/19/17)

·         Goldwin Said That Achieving 3% Growth Would Be “A Heroic Feat.” “‘The bottom line,’ said Goldwein, ‘is we should not be buying magic beans. Three percent growth is not completely impossible. But it would be a heroic feat to get there.’” (Leigh Buchanan, “Report: 3 Percent U.S. GDP Growth Rate Is Unrealistic,” Inc.com, 5/19/17)

The U.S. Treasury Forecasted 2.9 Percent GDP Growth. “Treasury said the tax plan would more than pay for itself in 10 years, basing its forecast on a 2.9 percent annual economic growth assumption, a level well above most economists’ expectations, as well other changes on which the White House has made little progress.” (Amanda Becker, “U.S. Treasury Tax Study Slammed As 'Fake Math' By Democrats,” Reuters, 12/11/17)

·         Senate Minority Leader Chuck Schumer (D-NY) Called This Analysis “Fake Math.” “Senate Democratic leader Chuck Schumer said the Treasury analysis was ‘nothing more than one page of fake math.’” (Amanda Becker, “U.S. Treasury Tax Study Slammed As 'Fake Math' By Democrats,” Reuters, 12/11/17)

Jason Furman, Formerly The Chief Economist For President Obama, Said That 3% Growth Would “Require Everything To Go Right … In Ways That Are Either Historically Unparalleled Or Toward The Upper End Of The Historical Range.” “This sentiment crosses ideological lines. It's shared by Jason Furman, formerly the chief economist for the Obama White House (‘it would require everything to go right … in ways that are either historically unparalleled or toward the upper end of the historical range’) and Edward Lazear, who served the same role for George W. Bush (‘pray for luck,’ he advises).” (Michael Hiltzik, “If Trump Thinks He Can Get More Than 3% Economic Growth, He's Dreaming,” The Los Angeles Times, 5/19/17)

Maya MacGuineas, President Of The Committee For A Responsible Federal Budget, Said That In Predicting 3% Growth The Trump Administration Is Guilty Of “Wishful Thinking And Fuzzy Math.” “Three percent does not sound like a huge number. It does not seem like the outcome of massive exaggeration. But the assumption in the president's budget that economic growth will reach and remain at 3 percent has led to an outcry from many experts — including us — that the administration is guilty of wishful thinking and fuzzy math.” (Maya MacGuineas, Op-Ed, “Why Is Trump's 3-Percent Growth Target Pure Folly? Because Math,” The Hill, 5/26/17)

11 Economists Surveyed By CNNMoney Said There Is “No Chance” The U.S. Economy Can Reach 4% Growth. “Donald Trump has a big promise for the U.S. economy: 4% growth. No chance, say 11 economists surveyed by CNNMoney. And a paper published Tuesday by the Federal Reserve Bank of San Francisco backs them up.” (Patrick Gillespie, “Trump Promises 4% Growth. Economists Say No Way,” CNN, 10/11/16)

Robert Brusca, Senior Economist At FAO Economics Said President Trump Is “Dreaming” When Predicting 4% Growth. “‘No, pigs do not fly,’ says Robert Brusca, senior economist at FAO Economics, a research firm. ‘Donald Trump is dreaming.’” (Patrick Gillespie, “Trump Promises 4% Growth. Economists Say No Way,” CNN, 10/11/16)

Former Chairman Of The Council Of Economic Advisors Austan Goolsbee: “You And Your Magic Beanstalk Beans Are Not Being Realistic” About 4% Growth . AUSTIN GOOLSBEE: “You And Your Magic Beanstalk Beans Are Not Being Realistic. I do think the republican congress is going to be remarkably more amenable to cutting taxes and funding infrastructure under a Republican president than they were under a democratic president but you know the Fed looked at that and when the Fed made its decision to raise rates and they upped their forcast by 1/10th of a percent, so I don’t know where you got 4%. I don’t think it will be that big.” (Fox Business’ “Varney & Co,” 12/19/16)

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 “Booming” Growth Is Another Win For President Trump And The Country

Bloomberg’s Jennifer Epstein Called Todays GDP Number A “Win For Trump.” “U.S. GDP Growth Hits 4.1%, Fastest Since 2014, in Win for Trump via @TheTerminal” (Jennifer Epstein, Twitter Feed, 7/27/18)

The New York Times’ Glenn Thrush Called Todays GDP Number “Big.” “Big --->” (Glen Thrush, Twitter Feed, 7/27/18)

Today’s “Terrific” GDP Report Shows “Booming” Growth. “GDP report shows booming 4.1 percent growth as Trump touts 'terrific' numbers” (Fox News Alert, Twitter Feed, 7/27/18)

GDP Grew At The Strongest Pace In 4 Years. “The U.S. economy grew 4.1% in the second quarter, the strongest pace in nearly four years, led by an export rally and consumer spending.” (The Wall Street Journal, Twitter Feed, 7/27/18)

Today’s 4.1 Percent GDP Growth Was “Very Good News.” “4.1 % economic growth in last quarter! VERY good news. Let’s keep it going! #GDP” (Trish Regan, Twitter Feed, 7/27/18)

“Hello Growth,” GDP Rose At The Fastest Rate Since Late 2014. “Hello Growth! Q2 US #GDP growth (annualized) at 4.1%, the fastest since Q3 2014 #USBOOM.” (Jeroen Blockland, Twitter Feed, 7/27/18)

The Economic Growth Rate Is Higher Than The Unemployment Rate. “The economic growth rate is higher than the unemployment rate. #BetterOffNow” (Brendan Buck, Twitter Feed, 7/27/18)

The Strong GDP Number Shows That “Tax Reform And Regulatory Relief Is Working For Manufacturers And For America.” “This is the best quarterly number since the third quarter of 2014 - tax reform and regulatory relief is working for manufacturers and for America.” (Jay Timmons, Twitter Feed , 7/27/18)

MSNBC On GDP Numbers: “Great News For The Country .” MSNBC’S WILLIE GEIST: “We have breaking news here. The economy grew 4.1% in the second quarter. Just getting that number in. It matched expectations from economists and is the best reading since 2014. U.S. markets are getting a big boost on this news. Jonathan Lemire Great news for the country and the president is sure to capitalize on it.” MSNBC’S JONATHAN LEMIRE: “I'm watching my phone for the tweet that's coming at any time, but this is also at the heart of the issue. As much as of coarse this investigation matters, the stories matter, the tape matters, right there about the economy, that is going to play more of a role in his re-election chances than anything else, and this is something if the economy keeps roaring -- we certainly have plenty of time for it to slow down -- but if that is something thatis the president is going to wrap his arms around, we expect a full-court press into next week about the economy, how the trump economy is bringing back jobs, we saw it yesterday in the Midwest with that factory plant opening. That's the turf he wants to be on right now and not all of this.” (MSNBC’s “Morning Joe,” 7/27/18)

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Club For Growth’s Stephen Moore: GDP Growth Decelerated During Obama’s Last Year, Roaring Now. CNN’S STEPHAN MOORE: “First of all, let me address this issue of reversion to the mean. I mean let's not forget the economy was decelerating when Obama left office. Over Obama's last year in office the economy grew at 1.6%. Now for the last year the economy is growing a little bit over 3. By the way I was on the campaign, most liberal economists said it would be impossible for Trump to get to 3 or 4% growth, we’re there now.” CNN’S CATHERINE RAMPELL: “For one quarter, for one quarter we’re at 4%.” MOORE: “Yeah I’m talking about for the last four quarters the economy is growing at a little over 3%. Look there's no question there's been a kind of trump effect here in terms of his policies. Now, you asked the question about trade. Look, I think the media has really buried the lead here what happened the other day with this EU deal. I've been following this very closely. I've talked many times to Donald Trump. I think this is game changer what happened on Wednesday where the Europeans blinked and they basically said we can't live with these tariffs they're proposing, especially the German auto tariffs and what happened was the Europeans said we will reduce our tariffs over time. Ultimately what we hope to get to would be a zero tariff policy with Europe which would be a game changer and now that allows us to focus on China. So I think the trade picture has improved a lot.” (CNN’s “Newday,” 7/17/18)

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CNBC’s Liesman: “Tax Cuts” Helping To Fuel “Strong” GDP Number. CNBC’S REBECCA QUICK: “Thank you very much Steve Leisman is here with more reaction to the report Steve, rapid response for CNBC 4.1%.” CNBC’S STEVE LEISMAN: “Yes right on the median forcast, the wisdom of the crown we take the tracking forcast and it was spot on. It's been running better than the Atlanta Fed which is my only metric which everyone else talks about the Atlanta Fed for reasons not clear to me.  But none of that is neither here nor there relative to the importance of this number it is a strong number. There's no denying that any way you bake it. The keys here I think are looking for what is fiscal policy and tax cuts and what is sort of one off items? Let me go through a few of these. Consumer spending 4% as Rick said better than expected, a lot of the numbers that we’re looking for north of 4, we’re looking for 3% consumer spending growth that’s something of a bounce back from the first quarter so I think you could say we’re at a higher level perhaps propelled by the tax cut because there's a little bit bigger checks out there, you have more people working wages are up a bit not doing too badly that’s a good number right there. Business investment 7.3% that comes off of an 11.5% number in the first quarter. So businesses Investment doing well. You can expect that's from the tax cut.” (CNBC’s “Squawk Box,” 7/27/18)

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STRONG GDP GROWTH IS CRITICAL TO THE ECONOMIC SUCCESS OF EVERYDAY AMERICANS

Rising GDP Translates To An Increased Standard Of Living

According To Economists, GDP Growth Raises Wages And Increases The Standard Of Living. “GDP growth, economists say, helps raise wages and living standards, and increases the size of the entire economic pie—making it possible for more people to have a bigger share.” (Alana Semules, “Why Economic Growth Is So Lackluster,” The Atlantic, 10/21/16)

Economists Can Measure The Living Standards Of A Country By The Growth Rate Of Its GDP Per Capita. “One way to measure the improvement in the living standards of a country is by looking at the growth rate of its gross domestic product (GDP) per capita. This measure can be decomposed into: The growth rate of GDP per hour worked (a measure of labor productivity) The growth rate of the number of hours per capita (a measure of the extent of labor utilization).” (Ana Maria Santacreu, “What Causes A Country's Standard Of Living To Rise?,” Federal Reserve Bank Of St. Louis,” 12/28/15)

·         A “Good Measure” Of Living Standards Is The “‘Value Of All Goods And Services Consumed Per Capita.” “For economists, a good measure of living standards would be the ‘value of all goods and services consumed per capita’ (per capita = per person).” (“Living Standards And Economic Growth,” Federal Reserve Bank Of Boston, Accessed 11/28/17)

·         Economists Commonly Use GDP Per-Capita To Measure The Standard Of Living In A Country.  “Such a comprehensive measure does not exist; so we turn to approximations. The most commonly used measure of standard of living is national output per capita, usually measured as GDP or GNP per capita.” (“Living Standards And Economic Growth,” Federal Reserve Bank Of Boston, Accessed 11/28/17)

Rising GDP Also Increases Tax Revenue Without Harmful Tax Increases

According To The Tax Foundation, The Best Way To Maximize Tax Revenue Is To Increase Economic Growth, Primarily By Increasing Investment. “The short answer to how we maximize tax revenue: increase economic growth. We can do this by limiting taxes on economic factors that drive economic growth, namely investment. This means reducing tax rates on businesses, limiting the double taxation of investment created by taxing corporate income at both the entity level (corporate tax) and the shareholder level (capitals gains and dividend taxes), and moving toward full expensing (which would allow businesses to account for all their costs).” (Andrew Lundeen, “Economic Growth Drives The Level Of Tax Revenue,” Tax Foundation, 10/15/14)

According To The Tax Foundation, There Is A Positive Correlation Between GDP And Increased Tax Revenue As Shown In The UK And In The United States. “Government in both places have seen revenue act independently of tax rates in some instances. In the United States through the 1960s and 1970s, top individual federal tax rates remained at 70 percent while revenue climbed to 27.9 percent in 1969 before dropping to 23.9 percent in 1971. Following the recession in 1981 and 1982, tax revenue dropped to 24 percent, then climbed steadily through 2000, despite top marginal income tax rates coming down to 28 percent and the corporate rate dropping to 34 percent in 1986. Tax revenue fell in the early 2000s before and after the 2001 Bush tax cuts, only to rise again after the 2003 Bush tax cut.” (Andrew Lundeen, “Economic Growth Drives The Level Of Tax Revenue,” Tax Foundation, 10/15/14)

The Economist: There Is Significant Historical Evidence That Tax Revenues Fluctuate With Increases And Decreases In GDP. “As The Economist writer implies, economic growth is a major driver of the level of tax revenues. In the times when tax revenues are up, the economy is doing well. When tax revenues are down, it’s because the economy is doing poorly. We see this in each of the times when revenue fluctuates. From the mid-1980s through the late 1990s the economy grew steadily and tax revenues grew along with it. Conversely, between 2007 and 2009, total tax revenue in the U.S. dropped from 26.9 percent of GDP to 23.3 percent of GDP. The driver: the financial crisis and great recession.” (Andrew Lundeen, “Economic Growth Drives The Level Of Tax Revenue,” Tax Foundation, 10/15/14)

PRESIDENT TRUMP’S ECONOMIC POLICIES HAVE LED TO INCREASED GROWTH

The GOP Tax Cuts Have Given Americans More Disposable Income And Are Boosting Consumer Spending, A Key Component Of Economic Growth

Consumer Spending Makes Up About 70 Percent Of GDP. “Consumer spending has continued to rise. Because it makes up about 70 percent of GDP, it's an important component for gauging overall growth.” (Irina Ivanova, “U.S. Second-Quarter GDP Growth Expected To Top 4%,” CBS News, 7/26/18)

Consumer Spending Is Strong, Supported By A Strong Labor Market And “A Lift To Disposable Income From The Tax Cuts.” “For now, consumer confidence seems boosted by low unemployment, according to Morgan Stanley Research. ‘Consumption remains supported by a strong labor market and a lift to disposable income from the tax cuts, although some of these benefits are being eroded by rising gasoline prices,’ Morgan Stanley economists wrote in a note.” (Irina Ivanova, “U.S. Second-Quarter GDP Growth Expected To Top 4%,” CBS News, 7/26/18)

·         Thanks To The Tax Cuts And Jobs Act “Many Workers” Saw Increased Take Home Pay In The Second Quarter. “The tax cuts' cornerstone was a permanent reduction in business tax rates, giving corporate profits an instant boost on paper. They would have been solid by mid-April, when corporations' first-quarter tax payments are due. Many workers, too, saw slightly larger paychecks in February or March, with higher-earning workers reaping bigger benefits.” (Irina Ivanova, “U.S. Second-Quarter GDP Growth Expected To Top 4%,” CBS News, 7/26/18)

Consumer Spending Is A Big Part Of The Increase In GDP, Driven By Retail Sales That Have Increased 5 Months In A Row “Which Is Really Kind Of Rare In This Economy.” “‘Retail sales have been really strong recently, up for five straight months, which is really kind of rare in this economy,’ said Ryan Detrick, senior market strategist at LPL Financial. ‘Consumer spending is a big reason the GDP number is expected to come in fairly strong.’” (Irina Ivanova, “U.S. Second-Quarter GDP Growth Expected To Top 4%,” CBS News, 7/26/18)

The Tax Cuts And Jobs Act Encourages Business Investment, Which Positively Impacted GDP Growth

The Tax Cuts And Jobs Act Could Impact Second Quarter GDP Positively By Encouraging Consumer And Business Spending. “Economists think growth will remain robust throughout 2018, buoyed by an ultralow unemployment rate and steady job and wage growth. At the same time, the late-2017 tax overhaul could encourage spending by businesses and consumers.” (Sharon Nunn, “U.S. Economy Was Weaker Last Quarter Than We Thought,” The Wall Street Journal, 6/28/18)

The “Stars Were Aligned” For A Strong GDP Number, Including The Tax Cuts And Jobs Act Providing A Boost To Consumer Spending And Business Investment. “The stars were aligned following 2 percent growth in the first quarter: The biggest tax overhaul since the Reagan era delivered another boost to consumer spending and business investment.” (Sho Chandra, “U.S. 4% GDP Growth Seen More ‘Luck of the Draw’ Than New Reality,” Bloomberg, 7/23/18)

Americans for Limited Government

Trump economic boom begins with 4.1 percent growth in Q2

July 27, 2018, Fairfax, Va.—Americans for Limited Government President Rick Manning today issued the following statement in response to the latest GDP numbers:

"Today's announcement that the second quarter GDP grew by 4.1 percent annualized is further proof that the Trump economic policies of tax cuts, deregulation and better trade deals are beginning to take hold. While there is still work to be done to reach a 3 percent annual growth rate for 2018, the accelerating economy demonstrates the kind of strength needed to meet or beat President Trump's 3 percent GDP growth promise. But these are not just numbers out of Washington, D.C. Since Trump became President, the number of working age adults aged 16-64 not in the labor force has dropped by 2.5 million even as that population increased by more than 938,000. This isn't about statistics, this about people's lives and people's hopes and dreams coming true. That is what truly matters.”

To view online: https://getliberty.org/2018/07/trump-economic-boom-begins-with-4-1-percent-growth-in-q2/

Interview Availability: Please contact Americans for Limited Government at 703-383-0880 ext. 1003 or at media@limitgov.org to arrange an interview with ALG experts.

 

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Democratic National Committee

Workers Haven’t Benefited From Economic Growth

 

Today Trump will try to boast about the economy, but the reality is that economic growth is not expected to continue at the same rate and workers have not benefited.  Workers’ wages have actually decreased over the past year.

 

Economists said Q2 GDP growth was artificially high and economic growth would not continue at the same rate after this quarter.

 

CBS News: “An ‘idiosyncratic’ quarter: Not even bullish economists expect the pace of the second quarter’s growth to continue, however, because it’s driven by ‘a number of idiosyncratic factors that are unlikely to be sustained in the second half of the year,’ according to Morgan Stanley.”

New York Times: “The second-quarter acceleration was widely anticipated by economists, a result of a confluence of events unlikely to recur. Most economists expect growth to slow in the second half of the year.”

 

Workers have not benefited from economic growth or the Trump tax law. Wages have fallen over the past year.

 

CBS News: “Year-over-year, rising prices have eaten up still-modest pay gains for many workers, with the result that real wages fell 1.4 percent from the prior year, according to PayScale.”


Vox: “While wages have risen by 12.9 percent overall since 2006, wages adjusted for inflation (so-called ‘real wages’) have actually fallen by 9.3 percent. And between the first and second quarters of 2018 — after the tax cuts were enacted — real wages fell by 1.8 percent.”