How Trump’s economy stacks up

Average economic growth under President Trump has outpaced the growth under Barack Obama, but not all of his recent predecessors.

Why it matters: GDP is the most comprehensive economic scorecard — and something presidents, especially Trump, use as an example of success. And it's especially relevant since Trump is running for re-election on his economic record.

Between the lines: Economists dispute how much credit presidents can take for a booming or sagging economy under their watch. There are factors that can boost or reduce growth outside of their policies.

• Where it stands: Unlike other presidents, Trump inherited a steady economy that’s since entered the longest stretch of growth in history. Interest rates remain low. Growth picked up in the wake of the 2017 tax cuts, but now the pace has moderated.

What he’s saying: “Our economy is the best it has ever been,” Trump said earlier this month in his State of the Union speech.

• But some aspects of the Trump economy, like wage growth and business investment, pale in comparison to other periods.
• While solid, “this is not a gangbusters economy,” Nathan Sheets, who’s held roles at the Treasury Department and the Federal Reserve, tells Axios.
• There have been periods with “high growth, low inflation, rapid productivity, and the gains from growth were being broadly shared across society. That was gangbusters,” says Sheets.

By the numbers: Last year the economy grew at 2.3%, after year-over-year accelerations in 2017 and 2018 — marking the slowest annual growth rate since Trump took office. Growth under Trump has yet to hit his oft-promised 3% mark annually.

• Economists say the effects of the tax are wearing off. Businesses were too unnerved by the trade war to spend money on new factories or equipment — a key driver of growth.

Yes, but: If history is any guide, an incumbent president isn't going to have a great shot at re-election if the economy tips into a recession under their watch.

• Under George H.W. Bush, the economy grew around 2% throughout his presidency, reflecting a return to growth after a recession and spiking unemployment that contributed to his election loss.

What to watch: Wall Street downgraded growth expectations in the first half of 2020, even as tensions over the trade war ebbed.

• There are big unknowns, like how hard the coronavirus and the Boeing 737 MAX production halt will hit the economy, if at all.
• Meanwhile, the resilient consumer may be losing momentum, government data showed Friday — a troubling sign, considering that spending accounts for two-thirds of economic activity.
• But economic growth could bounce back right as voters head to the polls — and that could help Trump right when he needs it.

Go deeper:

• America's booming economy is Trump’s 2020 tailwind
• 2019 stock market gains still leave Trump behind his predecessors