Economic Indicators Show The Economy Is Slowing & Trump’s Tax Cuts Aren’t Working
March 26, 2019
It’s clear Trump’s trillion-dollar tax cuts for the rich and big corporations aren’t strengthening the economy or lifting up working Americans. The latest economic indicators show that economic growth is expected to hit a sharp slowdown, consumer and business confidence is down, and the manufacturing sector and housing markets are slowing.
Despite Trump’s promises, business economists forecast a sharp slowdown in economic growth over the next two years.
CNBC: “The nation’s business economists foresee a sharp slowdown in U.S. economic growth over the next two years, in sharp contrast to the Trump administration’s predictions that growth will accelerate this year and next. That finding comes from the latest survey by the National Association for Business Economics being released Monday. Its economists collectively project that growth, as measured by the gross domestic product, will reach a modest 2.4 this year and just 2 percent in 2020.”
Consumer confidence fell short of expectations and declined for the fourth time in the last five months.
Bloomberg: “U.S. consumer confidence declined for the fourth time in five months on dimmer assessments of present conditions, suggesting that weak first-quarter growth and slower job gains in February are weighing on attitudes and potentially spending. The Conference Board’s index fell to 124.1 from 131.4, the New York-based group said in a report Tuesday. That missed all economist estimates in a Bloomberg survey calling for a rise to 132.5.”
Multiple economic indicators suggest the manufacturing sector is slowing, contributing to a decline in small business optimism.
MarketWatch: “The IHS Markit flash purchasing managers index for manufacturing in March fell to a 21-month low, while the services PMI weakened to a two-month low. The flash manufacturing PMI fell to 52.5 from 53 in February, while the services PMI fell to 54.8 from 56.”
Associated Press: “Last week the Commerce Department said factory orders rose 0.1 percent in January, a tiny increase that matched December’s reading but fell short of many economists’ forecasts.”
Associated Press: “The growing evidence of a slowdown in manufacturing is likely contributing to the dip in small business optimism that began early in the year. Reports this month from the government and an industry group point to a drop in manufacturing activity. While the manufacturing sector is a relatively small part of the gross domestic product — the government has estimated it at 11.4 percent in the third quarter of last year — most manufacturers are small businesses as are service companies that do business with them.”
Business executives’ confidence in the economy fell for the fourth consecutive quarter.
The Hill: “Economic confidence among the nation’s top CEOs fell for a fourth consecutive quarter and slid to its lowest level since 2017, according to a new survey by the Business Roundtable. Sales expectations and plans for capital spending and hiring over the next six months fell in the first quarter of 2019, according to the Business Roundtable’s CEO Economic Outlook Index released Wednesday. The index, which has averaged 82.4 over the previous nine quarters, fell to 95.2, down 9.2 points from the fourth quarter of 2018.”
The housing market is slowing, and housing starts decreased by the largest amount in eight months.
Bloomberg: “U.S. new-home groundbreakings fell in February by the most in eight months on a drop in single-family homes, suggesting buyers and builders remain wary despite higher wages and a drop in mortgage rates. Residential starts slumped 8.7 percent to a 1.16 million annualized rate, below estimates, after an upwardly revised gain the prior month, according to government figures Tuesday. Permits, a proxy for future construction, dropped 1.6 percent to a 1.3 million rate.”