Christine Romans: Trump's economy is just "average", show GDP revisions

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This word has hardly been used to describe the president. But the revisions to Friday's GDP reveal a decidedly bbad economy.

The second quarter recorded growth of 2.1%, down one point from the first quarter. The economy stumbled at the end of the year and the 4.2% second quarter of 2018, which had been so badly screwed up, was revised to 3.5%.

But to get a true picture, it's best to smooth it out. Do not forget that the trend tells the story – not a single point of data. And this trend is a ten-year expansion with an average annual growth of 2.3%. The quarterly revisions of last year give an image that does not match the promises of 3% economic growth of the president and that is far from its hyperbolic promises for growth of 3, 4, 5%.

The president and his team pledged an economy overburdened by mbadive corporate tax cuts and historic regressions of regulation. Look at this bar chart.

Where exactly is this explosion of growth? In fact, it seems that the economy was stronger before tax cuts.

The chief cheerleader has an explanation, of course. He blames the Fed.
Trump calls the Fed's policy an anchor around our neck. However, although the Fed raised interest rates four times last year, official rates remain well below the post-war average.
Meanwhile, consumers remain the strongest part of the economy – it's business investment stagnating. It's hard to see the Fed at stake here. Consumers are spending, but the president's trade wars are causing trade disruptions that are holding back business.
And an economy exceeding 2% represents a flashing red light that will allow the Fed to reduce rates? The last time the Fed cut official rates was in the depths of a financial crisis, to stabilize a system about to collapse. Today, it is the best economy in the history of the world, as the president repeated many times.

Even taking into account the standard exaggeration on the part of the president, it is difficult to face sharp rate cuts when the economy is about average.

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