For 10 years, since June 2009, the U.S. economy has been growing. Barring a radical economic downturn, July 2019 will mark the longest economic growth period in U.S. history, according to Bloomberg, MarketWatch and other business news outlets.
President Trump likes to emphasize that this record will be set during his presidency. Trump tweeted on June 4, “In many ways this is the greatest economy in the HISTORY of America and the best time EVER to look for a job!”
Economists credit the president’s policies – lower taxes, plus an increase in government spending – for faster growth rates starting in 2018.But the current expansion has had the slowest growth rate and salaries and wages have also been growing slowly by past standards, according to Bloomberg.
The economy’s growth has been 58 basis points faster during Trump’s presidency compared to the Obama-era expansion. In 2018, the economy grew at a relatively brisk 2.9%, picking up from its tepid 2.2% average pace through most of the expansion, largely because of federal tax cuts and spending increases spearheaded by President Donald Trump, reported Bloomberg.
Job growth has slowed from an average monthly pace of 223,000 in 2018 to 164,000 so far this year. That’s a notable downdraft, but it was largely expected as the effects of the tax cut fade and low unemployment makes it harder for businesses to find workers.
We do not know how long economic growth will continue but the longer it holds the more potential dangers it poses, according to economists.
One of the biggest dangers seems to be the American-Chinese trade war, reported USA Today. Trump has slapped a 25% tariff on $250 billion in imports from Communist China, and China has retaliated with tariffs on U.S. exports to that country.
Mark Zandi, the chief economist of Moody’s Analytics, estimates the trade fight will cut economic growth by about two-tenths of a percentage point both in 2019 and 2020 to 2.4% at 1.7%, respectively.
Some analysts say, the main reason why this expansion has lasted so long is not because of the policies of either the Trump or administration. It is simply the result of the severity of the recession that hit the United States between 2007 and 2009.
Jeffrey Frankel, the Harvard University Professor of Capital Formation and Growth and a National Bureau of Economic Research committee member, told The Guardian, “The Great Recession was the United States’ worst downturn since the 1930s. The deeper the hole, the longer it takes to climb out.”