WASHINGTON (AP) — A new White House report says the U.S. economy is growing faster than expected, even though the annual gains of 3% that President Donald Trump promised to voters have yet to be achieved.
The annual economic report of the president released Thursday said the economy added more jobs, experienced a lower unemployment rate and grew faster than the projections in an August 2016 report by the Congressional Budget Office. It’s part of a broader effort to refute evidence that Trump simply inherited a healthy economy from the Obama administration that had been expanding since the middle of 2009.
“The overall evidence of the report as we see it is that three years into the Trump administration the U.S. economy continues to outperform pre-2016 election expectations,” said Tomas Philipson, acting chairman of the White House Council of Economic Advisers.
Job gains and the unemployment rate have been following similar paths since Trump succeeded Barack Obama — and the former president tweeted out Monday that the roughly $800 billion stimulus package he signed into law 11 years ago had “paved the way for more than a decade of economic growth and the longest streak of job creation in American history.”
The economy under Trump saw a bump in growth in 2018 following the tax cuts that were signed into law during his first year in office. Trump pledged at the time that the roughly $1.5 trillion in tax cuts over 10 years could propel growth upwards of 3%, if not “4, 5, and maybe even 6%.” In fact, growth topped out at 2.9% in 2018, matching the 2015 rate before Trump became president.
The Trump administration can accurately say that growth has occurred faster than what the non-partisan CBO forecast in 2016.
But Trump’s tax cut was not part of that forecast — and the budget deficit is 42% — or $301 billion — higher today than the CBO estimated at the time. Also, the interest charged on 10-year U.S. Treasury notes is half of what CBO predicted, meaning that it is cheaper for the government and consumers to borrow than what government economists believed it would be.
The White House report credits the administration for reversing negative trends such as opioid addiction, saying that efforts to reduce the supply and demand for the drugs as well as provide treatment “may have contributed to a flattening in overdose deaths.”
It also claims to have reduced economic inequality, as the poorest 50% of Americans now hold 1.6% of the nation’s wealth. That figure from the Federal Reserve is up from the end of Obama’s presidency. But it largely reflects gains in home prices and housing equity, which had been slumping through 2011 as a result of the foreclosure crisis and Great Recession.he richest 1% of Americans hold 32.2% of the nation’s wealth, slightly more than what they held before Trump became president.