Real GDP Percent Change from Quarter One Year Ago, Annually, End of Period
The Bureau of Economic Analysis (BEA) released 2019 second quarter GDP last week. It registered (first pass) at a slightly-above-consensus 2.1%, down from Q1’s 3.1%.
Of equal (or greater) interest were the revisions of five years’ worth of data, as described here.
The conclusion of the revisions was: Full-year 2018 was revised down to 2.5%, lower than 2017’s 2.8%. Mind you, this is on a Q4/Q4 basis, which of course was the way the administration told us this number needed to be viewed (when it exceeded 3%, anyway). The annual year-over-year remained unchanged at 2.9%.
The downward revision to under 3% – to say nothing of the 4% we were promised – flies in the face of everything we were told about the “boom” we’d see from the 2017 tax cuts and deregulatory regime, the signature policies of the Trump administration:
“With the tax plan, we’re going to easily see 4 percent growth next year,” National Economic Council director Gary Cohn said in an interview on Fox Business.
I see no reason why we don’t go to 4, 5, and even 6 percent. And I don’t want to go beyond that because then it will be criticized if we don’t hit it.
Adding insult to injury, last year’s much touted 4% Q2 was also revised away, down to 3.5%, taking away yet another talking point.
Trump’s lofty forecasts have not yet been realized. What we’ve been achieving is the more-or-less same trend growth since 2010. The Tax Cuts and Jobs Act (TCJA) has led the USA to trillion dollar annual deficits; the national debt continues to swell. No one can make the claim — at least not with a straight face — that the TCJA has paid for itself as promised.
On the whole, left the country’s balance sheet in worse shape than it had been prior to its passage, without a whole lot to show for it. The TCJA has, in every way, been an economic nothing-burger.