Are We in a Trump Boom?

Are we in a Trump boom? We ask because of the dispatch from the Atlanta Federal Reserve Bank in respect of growth. It says that the GDPNow model’s estimate for real growth of the gross domestic product is edging up — now at 4.2 percent. In the second quarter our economy expanded by 3.8 percent. The recent two quarters are averaged at 4 percent. Unemployment, as of September, is at 4.4 percent. Why shouldn’t this be called the Trump Boom?So we put in a call to our columnist Larry Kudlow. When asked if America was in the midst of a boom, he replied that the Trump economic program of supply-side tax cuts, lower regulation, greater energy production, and fairer trade are starting to yield dividends. “Mr. Trump is not ideologically inclined,” Mr. Kudlow wrote this week in his column in the Sun, “but as a former businessman, he knows what makes the economy tick.”That tracks with the Atlanta Fed’s estimate for the third quarter. The Peach State branch of the central bank just raised by a tenth of a percent its projection for growth in the period ending September 30. Even though real gross private domestic investment growth fell to 4.8 percent from 4.9 percent, the Atlanta Fed said, this “was more than offset” by the effects of “net exports to third-quarter real GDP growth,” a signal that Mr. Trump’s trade policy is working.The prospect of 4 percent, or greater, growth in GDP seems to vindicate the high expectations for Mr. Trump’s budget and tax legislation. The president himself took a kind of victory lap on this head the other day when he addressed the U.S.-Saudi Investment Forum. “Americans have rejected the failed far-left models,” he said, “of high taxes and massive spending, soaring costs, crushing regulations and trillions of dollars in green new scams.”Mr. Trump added that “nine months ago, our country was dead, but now America is the hottest country anywhere in the world. We’re the hottest country.” Of his tax cuts, he explained that “we’re rewarding those who build and create, invent and invest in the USA.” He called the economic growth spotlighted by the Atlanta Fed “amazing,” marveling that “it’s lifting up the Americans and American economy like nothing’s — nobody’s ever seen before.”It’s not our intention to ignore countervailing factors that could take some of the wind out of the sails of a Trump Boom. Feature, say, today’s report from the University of Michigan finding that “consumer sentiment fell in November to one of the lowest levels on record,” as Bloomberg reports. “Consumers remain frustrated about the persistence of high prices and weakening incomes,” the survey’s chief, Joanne Hsu, said.Plus, too, September’s unemployment rate was higher than August’s, though hiring exceeded expectations. The jobless rate announcement for October is delayed by the shutdown. Morgan Stanley, meanwhile, predicts for the economy “1.8% real growth in GDP in 2026 and 2.0% in 2027.” JPMorgan Asset Management anticipates a 1 percent increase in GDP in the fourth quarter of 2025, followed by “above 3% growth in the first half of 2026.” Yet the growth numbers being mooted by the Atlanta Fed, if they hold, suggest a rebuke of the conventional wisdom that America’s economy is no longer able to achieve high growth. In 2020 Lawrence Summers encouraged “accepting the reality of secular stagnation and focusing policy debates on the challenges it poses.” Mr. Trump, it seems, has the better idea when he crowed this week about “unleashing really the most incredible new prosperity.”

Are We in a Trump Boom?

Are We in a Trump Boom?

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