President Trump got lucky this year with the S&P 500 and Nasdaq stock indices hitting new records in the first quarter after being down last December due to the expectation of an imminent global slowdown. Job growth is at 200,000 per month and first-quarter growth is saying that the economy expanded at a 3.2 percent rate in the first three months of 2019. This is quite better than expected after the government shutdown dragged things down a bit.
But economists have not been swayed by the positive reports so far this year, saying that it’s just a brief boost before the stall. As fiscal stimulus from Washington trickles out its last drops, oil prices rise, and Trump’s trade war continues to backfire, economists warn that strong growth in the first quarter will only be temporary. According to Douglas Irwin, economist and professor at Dartmouth, the rest of 2019 should not be expected to stay as strong. He says that “The Commerce Department’s report cited higher inventories and lower imports boosting first-quarter growth, factors that could reverse later in the year.”
Despite this, Trump is taking advantage of the good news from the quarterly report to boost his chances at re-election in 2020. Undeterred by the Mueller report, Trump continues to repeat his success in the marketplace for a much needed distraction. This has actually been an ongoing theme throughout his presidency. According to marketplace.org “Trump loves talking about the markets, almost as much as he loves taking credit for market success. He’s tweeted about the stock market 54 times.” Here are just a couple examples:
If the market does take a downturn before the 2020 race starts, Trump’s campaign for re-election will be more difficult. His popularity ratings have been in steady decline and did not bounce back much after the good economic news. His administration has been fraught with image problems since day one and they have done little to fix the problem. Most would agree that he has lost the appeal that he charmed America with in 2016.
But that doesn’t mean we should underestimate ol’ Teflon Don. He’s good at taking credit for just about any positive statistic he can dig up, which is quite a few if you know where to look. He’s a master at smooth talking voters, he can shrug off problems like they are an easy fix for him (usually while making huge promises to voters), and he’s also a master of the blame game. If the economy does take a bad turn, he will be the last person to take responsibility for it no matter what the facts say.