“We’ve accomplished an economic turnaround of historic proportions,” President Donald Trump told reporters on Friday, shortly after after the Bureau of Economic Analysis released a report estimating that the economy grew by 4.1 percent in the second quarter of 2018,—the fastest rate since 2014. On Twitter, Vice President Mike Pence took a victory lap.
The numbers are certainly positive. “If economic growth continues at this pace, the U.S. economy will double in size more than 10 years faster than it would have under either President Bush or President Obama,” Trump said. The key word, however, is “if.” During the campaign, Trump promised a growth rate of 4 percent annually, not per quarter. A 4.1 percent growth rate is strong, but it’s also not the strongest quarter of the last decade. Obama’s presidency saw four quarters with stronger GDP growth.
And as many analysts pointed out, one quarter of strong growth is not necessarily indicative of the future. “A single three-month period of strong growth is not exactly unprecedented,” Washington Post economics columnist Catherine Rampell wrote on Thursday. “It’s also not a sign that the economy is going gangbusters or has been fundamentally transformed. What matters is whether that strong growth is sustainable.”
On Friday, Trump insisted that the GDP growth was “very, very sustainable.” “This isn’t a one-time shot,” he said, arguing that the economy would continue to grow due to the Republican tax cuts, his trade war, and the administration’s deregulatory agenda. But Rampell believes economic growth may be temporary, due to businesses “freaking out about Trump’s trade war... they ‘doomsday prepped’ by stockpiling raw materials, intermediate goods and finished products before tariffs raised costs on all those things,” she wrote. “In other words, perhaps a bit counterintuitively, the very thing that may make Trump think his trade war is working—unusually strong growth this past quarter—may be evidence it’s about to backfire.”
It’s therefore impossible to tell if Trump is achieving the economic growth he claims. He seemed to acknowledge as much on Friday. “I won’t go too strong” in my predictions, he said, “because then if it’s not quite as good, you’ll not let me forget it.”