Trump Hasn't Prepared Us for the Inevitable Economic Slowdown

President Trump regularly and proudly takes credit for the U.S. economy’s strong performance. And with rapid growth during the second quarter, the stock market strong, the unemployment rate back below 4 percent and the midterm elections looming, Trump’s rhetoric and that of his supporters will probably escalate in coming months.

In fact, however, the president receives more of a boost from the strong economy than the other way around. This conclusion will only be reinforced if Trump’s current steps toward a trade war retard U.S. economic performance, as is increasingly feared. A variety of observations are pertinent:

First, history suggests that presidential popularity rises with declining unemployment. It is reasonable to suppose that, if unemployment was at its historical average of 5.8 percent, instead of the current 3.9 percent, Trump’s approval rating would fall lower than its already anemic level. As it is, he is less popular than any first-term president with an unemployment rate less than 5 percent.

Second, the acceleration of growth as we have observed is well within the normal range of growth forecast errors. Before the 2016 election, when a Trump presidency was not anticipated, consensus forecasts for the U.S. economy were 2.2 percent growth for 2017 and 2.1 percent for 2018. The actual outcome in 2017 of 2.2 percent and the current consensus forecast of 2.8 percent for 2018 do not represent a statistically significant fluctuation from the mean.