The U.S. economy was not great again in the first quarter of Donald Trump’s presidency.
The Commerce Department said Friday that gross domestic product expanded at just a 0.7 percent annual rate in the first three months of the year, a sharp drop from the 2.1 percent growth in the final quarter of last year. It marked the economy's worst performance since the first quarter of 2014.Ana Swanson and Max Ehrenfreund report at The Washington Post:
First-quarter GDP data has been notoriously bad in recent years only to improve in subsequent months. But the grim headline a day before Trump travels to Pennsylvania to celebrate his first 100 days delivers a significant political blow to a president who loves to hype economic data like strong jobs reports even though his policies so far have little to do with them.
Many economists expect U.S. growth to rebound in the second quarter of 2017, and they believe it to be on solid footing in general, especially as it is bolstered by the improving economic situation abroad.
Still, in the long term, they expect GDP growth to hover around 2 percent. They argue that the economy Trump has promised — one in which GDP is expanding at a pace of 3 percent a year or more and 25 million new jobs are created in the next 10 years — is probably unattainable.
Long-term changes in the economy, including demographic trends such as the aging U.S. labor force, will also complicate Trump's bid for rapid economic growth, the experts say. Although more Americans have gone back to work since the financial crisis nearly nine years ago, the percentage of the population that is working has declined in recent years as baby boomers retire, limiting how much the economy can produce. At the beginning of 2000, 67.3 percent of the adult population was working or looking for work. As of last month, that figure was 63 percent.
Diane Swonk, a Chicago-based economist, took a dim view of Trump's proposal to create 25 million jobs in the next decade.
“That's more than we generated in the 1990s, the longest expansion in the post-World War II period, which is significantly more robust than what we have now — mostly because we had a lot more people to employ,” she said. “Are you going to have 80-year-olds working at McDonald's now? What are we talking about?”
“There's been a resistance to deal within the constructs of mathematical reality,” she said.