At the start of the year, economists predicted an economic slump ahead. President Trump’s already low approval ratings were plunging. The Mueller report would threaten his presidency. And Democrats, we were told, would be driving the agenda for the next two years over a crippled presidency.
It’s four months later and, if anything, the opposite has occurred on every front.
The economy appears to be gaining strength. Trump’s approval rating is rising. The Mueller report was a dud. And House Democrats are fighting among themselves.
On the economy, the consensus earlier in the year was for the GDP to barely eke out a gain in the first quarter.
In January, the average growth estimate by economists surveyed by Wall Street Journal was a mere 1.8%. At the time, the Journal quoted Diane Swonk, chief economist at Grant Thornton, saying “the straws on the camel’s back are really piling up and the back’s beginning to bend.”
In February, the National Association of Realtors forecast Q1 growth at just 1.3%.
In March, Reuters reported that “The economy is losing speed as the stimulus from a $1.5 trillion tax cut package and increased government spending fades.”
Now, days before the government releases its first growth estimate for Q1, the mood has suddenly turned around. Bloomberg on Saturday reported that “The U.S. economy is set to show fresh signs of stabilizing and indeed even strengthening after its recent soft patch. Wall Street estimates are creeping higher with the consensus of economists surveyed by Bloomberg pointing to a 2.2 % advance.
The Federal Reserve Bank of Atlanta’s GDPNow estimate for Q1 is currently at 2.8%. A month ago, it was below 1%.
And just a few weeks after Reuters told everyone that the economy was losing speed, it reported that strong retail sales were “the latest indication that economic growth picked up in the first quarter after a false start.”
Should the economy perform better than expected, it wouldn’t be the first time this has happened since Trump took office. Little of what’s happened over the past two years was supposed to occur, at least according to mainstream economists.
For working Americans, this is great news. But for Trump haters, it is terrible. After all, if the economy remains robust through this year, it will vastly increase the chances of a Trump reelection.
In fact, Goldman Sachs economists are now giving Trump a narrow advantage in the 2020 election.
Meanwhile, Trump’s approval rating hit 45% in the Gallup tracking poll. That’s tied with Barack Obama’s approval rating at the same point in his first term. And while Obama’s was heading down — it would be 40% by August of that year — Trump’s has been climbing.
The Real Clear Politics average approval rating has Trump at just shy of 44%, up from 40.8% in February.
Meanwhile, rather than push a winning legislative agenda, House Speaker Nancy Pelosi is at war with the growing far-left base of her party, trading barbs with Alexandria Ocasio-Cortez, and warning Democrats not to pursue a Trump impeachment, all while the left rallies behind ideas to socialize medicine (Medicare for All), socialize the economy (Green New Deal), and open borders.
Who could have predicted such developments? Probably any one not blinded by fear and loathing of Trump.