For the first time in 13 years, America’s economy hit the 3 percent growth milestone for a calendar year, thanks to an expectations-beating fourth quarter in 2018.
GDP grew by 3.1 percent from the fourth quarter of 2017 to the fourth quarter of 2018. Because of the math behind how GDP growth is calculated, this time period is “a better measure of how the economy actually performed in 2018” than a year-over-year figure, according to former President Obama’s top economist.
For two straight years, growth has matched or exceeded the Trump Administration’s own forecast. That result will come as a surprise to some of the President’s critics. “Apparently, the budget forecasts that U.S. economic growth will rise to 3.0 percent because of the administration’s policies,” one prominent liberal economist wrote in 2017.
“Fair enough if you believe in tooth fairies,” he added.
Those predictions haven’t aged well. In the real world, the Trump Economy continues to bust expectations across the board. Job growth in January 2019 reached 300,000, for example—compared to the Congressional Budget Office’s January 2017 projection of 71,000 per month. And for the first time in a decade, wages rose 3 percent.
This growth isn’t a continuation of the economy President Trump inherited. It’s an acceleration. Had the pre-2017 growth trend continued, economic growth would have been 2 percent in both 2017 and 2018. The actual 3.1 percent growth rate we got in 2018 represents $280 billion more in American economic output.
“The [GDP] report shows how Republican-backed tax cuts may have continued to aid growth and help bring the full-year figure to 3.1 percent, just above President Donald Trump’s 3 percent goal,” Bloomberg reports. Indeed, the 1.1 percentage point above expected growth “is almost exactly in line” with what economic research suggests would happen if a tax bill “of the same magnitude as the Tax Cuts and Jobs Act” took effect, the Council of Economic Advisers wrote today.
In others words, we have some bad news for pessimists on the American economy: It turns out pro-growth policies actually deliver growth. Who knew?
Larry Kudlow, as always, gets right to the point: “The policies are WORKING.” pic.twitter.com/dQqHVzFNVz
— The White House (@WhiteHouse) February 28, 2019