For quite a while, Donald Trump was so convinced of his ability to unleash unprecedented economic growth that he made rather ridiculous promises to the public. As we we discussed a few months ago, Candidate Trump routinely promised “4% annual economic growth” – and in some cases, he suggested his policies could push growth to as high as 6%.
After the election, someone must've told the president that those promises were wildly unrealistic, so the White House moved the goalposts a bit, lowering the target to 3% GDP growth.
In Trump's first year in office, economic growth reached 2.2%, which wasn't bad, though it was short of the Republican's promises. In his second year, according to Trump's own Commerce Department, growth reached 2.9% -- which is certainly very close to the president's revised goal, but not quite the number Trump had in mind. (It was the same growth Americans saw in 2015, the year Trump launched his campaign, when he said the economy was awful.)
And yet, Trump and the Trump administration apparently aren't on the same page. For example, a few weeks ago, the White House published a curious report insisting that "economic growth has reached 3 percent for the first time in more than a decade," adding that all of the credit should go the president. Yesterday, at event in Ohio, Trump was also eager to boast about crossing the threshold.
"We just came out with numbers -- the Economic Report of the President: 3.1 percent GDP. The first time in 14 years that we cracked 3, right? That's pretty good -- 3.1. The press tried to make it 2.9. I said, 'It's not 2.9.' What they did is they took odd months. I said, 'No, no, no. You go from January to December. You don't take certain months and add them up.' Because I said, 'We're going to break 3.' And we did. We did 3.1.
"The fake news tried to change it but we caught them. I said -- I said, 'You know, we didn't break the 3. Oh, that's terrible.' They said, 'Yes, sir, you did. They just took odd months.' I said, 'No, no, January to December.' 3.1 percent, first time in 14 years. Congratulations. Sort of incredible. It's true."
It's not actually true.
Admittedly, this can get a little confusing, but the White House is playing an annoying little game. Here, for example, is the actual report from the Trump administration's own Bureau of Economic Analysis. It says, "Real GDP increased 2.9 percent in 2018."
Twice yesterday, Trump tried to tell an audience in Ohio that journalists "tried to change it." That's silly. The media reported 2.9% growth because that's what Trump's own Commerce Department said in published documents.
So why is the president running around bragging about 3.1% if his own team said it's 2.9%? The New York Times noted overnight, "This claim conflates two different gross domestic product growth figures. The 3.1 percent figure refers to the increase in G.D.P. from the fourth quarter of 2017 to the fourth quarter of 2018. The 2.9 percent figure refers to the increase in economic output from the annual level."
What's more, if we play Trump's game and look at GDP numbers the way he suddenly wants us to, he ends up stepping on one of his other talking points: through this lens, economic growth topped 3% in 2015, too, which means the president can't claim to have crossed the 3% threshold for the "first time in 14 years."
The circumstances matter, of course. Trump not only made bold promises during his campaign, he also signed a massive package of Republican tax breaks, which he and other GOP leaders insisted would send the economy into overdrive. That's not what happened.
But to play foolish numbers games like these is annoying and dishonest.
Update: I heard from a few readers who were confused by the details, so let me try to make this plain: if we measure economic growth year over year, as most observers do, we saw 2.9% growth last year. If we measure it quarter over quarter, it was 3.1%.
If we go with the second approach, as the White House now prefers, this necessarily contradicts the rest of Trump's argument -- because using this metric, the U.S. economy has topped 3% growth several times over the last 14 years.