President Trump touts the economy every now and then, taking credit for the stock market’s record rise, and the few job deals he’s negotiated. But a closer look at reality reveals a much gloomier picture.
If you happen to own stocks, no doubt you have richly benefited from the market’s record rise in the past six months. If you’re among the millions of lower to middle class Americans struggling paycheck to paycheck, or still without a job, it’s a very different story.
Let’s look at the facts.
Too many people are still hurting and tightening their belts and nowhere is that more evident that in the U.S. Commerce Departments’s income growth report in June. It showed that consumer spending is turning in its weakest performance in seven months.
Incomes were flat in June and barely registered 0.3 percent growth the month before. Spending slowed to a crawl, inching up 0.1 percent in May.
Under President Obama, economic growth seemed locked into the 2 percent range year after year, and this year looks no different.
The Gross Domestic Product (GDP), the broadest measure of how our economy is doing, rose an anemic 2.6 percent rate in the second quarter from April through May, up from 1.2 percent in the first quarter.
Another indication of the economy’s weakness can be seen in the auto industry. U.S. carmakers reported bleak numbers Tuesday that showed car and light truck sales declined for the fifth month in a row, according to Autodata which tracks the automotive industry.
Ford said its sales fell 7.5 percent in July, while Fiat Chrysler’s sales plunged 10 percent. Durable goods orders are an important gauge of the economy’s health, but June’s huge 6.5 percent spike was dismissed as “a mirage” by Market Watch.
Set aside the aircraft and auto industries, and orders crept up by a minuscule 0.2 percent, “and a key measure of business investment fell for the first time in 2017,” the economic watch dog reported.
Overall, “Factory orders, production and hiring all grew more slowly in July,” The Associated Press reported on Tuesday.
Another sign of the economy’s weakness can be seen in rising inventories in retail and wholesale products. The Commerce Department reported that both were up by 0.6 percent in June among durable and nondurable goods.
But rising “inventories can send mixed messages — one of confidence, in that companies are getting products to eventually sell, but also one of tepid demand,” says Market Watch.
And “demand appears to have tapered off a bit as the White House’s agenda gets bogged down in Washington,” the economic website reports.
“Bogged down” is putting it mildly. The key to getting America’s economy moving again is passing the GOP’s tax cut package as fast as possible. But it faces a number of legislative road blocks, especially the August recess when Congress takes the entire month off.
Moreover, before the Republicans can turn to tax cuts, they must pass a new budget by the end of September to avoid a government shutdown. At the same time there will be a bitter fight over a debt limit bill on just how much the U.S. Treasury can borrow to keep the government funded over the next year or two.
Earlier this year, Republican leaders had expected that they would be able to begin work on a pro-growth tax cut bill in September, but no one believes that now.
Instead, reports from Capitol Hill insiders say Congress may not be able to complete its work on the bill until next year, at the earliest.
As of now, Republican leaders still haven’t agreed on the basic shape and size of the tax cuts or even whether they will be permanent or temporary.
Meantime, the U.S. economy continues to bumble along at a subpar pace. And there is “little evidence that Trump’s policies have had much effect on the economy,” writes economic analyst Ben White in Politico, the widely read Washington website.
“Business and investor confidence soared after the election on hopes of deregulation and sweeping tax reform. The stock market also raced ahead. Shares on Wall Street have retained those gains, but other measures of confidence have begun to drop following the long fight over health care,” he wrote this week.
“And Trump’s promise of the biggest tax cut in history remains far from fruition.”
According to nationwide surveys, most Americans are unhappy with the economy’s lethargy and that is especially reflected in Trump’s dismal job approval polls.
Just 39 percent of Americans in the Gallup Poll’s daily, nationwide surveys last month approved of the job he is doing thus far, substantially below approval polls for the previous nine presidents in their first six months in office.
• Donald Lambro is a syndicated columnist and contributor to The Washington Times.