By Tom Ozimek
“We have ended the war on American workers, we have stopped the assault on American industry, and we have launched an economic boom the likes of which we have never seen before,” Trump said at the Economic Club of New York, touting the strength of the U.S. economy.
“Last year, GDP growth matched the fastest rate in more than a decade, and it was the best of the G7 countries by far,” Trump said.
Overall economic growth in the second quarter of 2019 stood at 2.0 percent, with Texas leading the charge.
“The percent change in real GDP in the second quarter ranged from 4.7 percent in Texas to 0.5 percent in Hawaii,” the Bureau of Economic Analysis wrote in a Nov. 7 press release (pdf).
“Mining increased 23.5 percent for the nation,” the agency said, adding that this industry “was the leading contributor to the increases in Texas, Wyoming, Alaska, and New Mexico—the fastest growing states.”
Professional, scientific, and technical services grew by 7.4 percent overall, while wholesale trade saw a contraction of 6.7 percent.
“Wholesale trade was the leading contributor to slow growth in Hawaii, Maine, and New Jersey—the slowest growing states,” the agency said.
Jobs, Jobs, Jobs
In his speech, Trump touted the improving labor market, saying that his administration has created nearly 7 million new jobs.
“Before I took office, the Congressional Budget Office projected that fewer than 2 million jobs would be created by this time in 2019,” he said. “Instead, my administration has created nearly 7 million new jobs. We beat predictions more than three times the highest estimate that I saw during the campaign.”
Trump also said the unemployment rate had recently “achieved the lowest rate in 51 years.”
“African American unemployment, Hispanic American unemployment, and Asian American unemployment, have all reached the lowest rates in history,” the president said.
According to the Bureau of Labor Statistics, the unemployment rate is near record lows.
“They just announced we have the highest number of people working in our country in the history of our country. Almost 160 million people. We’ve never been close to that number,” Trump said.
Figures for October 2019 show that of a total labor force of just over 164.4 million, 158.5 million people were employed, according to the Department of Labor and Training.
Wage growth, which under the previous administration struggled to break out, has seen a more pronounced, steady rise under Trump.
“Perhaps most importantly—after years of stagnation and decline—American wages, salaries, and incomes are rising very fast,” Trump said.
“Median weekly earnings of the nation’s 118.4 million full-time wage and salary workers were $919 in the third quarter of 2019 (not seasonally adjusted),” the U.S. Bureau of Labor Statistics reported in mid-October (pdf). “This was 3.6 percent higher than a year earlier, compared with a gain of 1.8 percent in the Consumer Price Index for All Urban Consumers (CPI-U) over the same period.”
Trump credited his administration’s policies with the continued U.S. economic expansion. The president wrote in a tweet before his speech: “Economy is booming. Seems set to have another record day.”
Economy is BOOMING. Seems set to have yet another record day!
— Donald J. Trump (@realDonaldTrump) November 12, 2019
Taking Aim at the Fed
Trump said the economic boom took place despite the Fed’s rate increases early in his presidency.
He criticized the Fed’s quantitative tightening and eight rate increases, which he called, “far too fast an increase and far too slow a decrease.”
“Because remember, we are actively competing with nations who openly cut interest rates so that now many are actually getting paid when they pay off their loan, known as negative interest,” Trump said.
He added that the Fed “doesn’t let us play at that game.”
“It puts us at a competitive disadvantage to other countries.”
Stocks, Dollar Rise
Global equity markets and the dollar rose on Tuesday as Trump reiterated the United States is close to signing a trade deal with China but offered no new details.
Stocks on Wall Street set fresh record highs before Trump’s highly anticipated remarks at the Economic Club, but slowly pared some gains after the speech, which contained no major policy announcements.
Trump talked about his administration’s economic record but did not announce a venue or date for signing a trade deal with Chinese leader Xi Jinping as market speculation had suggested he might.
China Trade Deal ‘Close’
Trump said the United States is “close” to reaching a phase one trade deal with China, while warning that he would “substantially raise” tariffs if the deal collapses.
“They are dying to make a deal. We’re the ones that are deciding whether or not we want to make a deal,” Trump said during the speech.
“We’re close. A significant phase one trade deal with China could happen. Could happen soon. But we will only accept a deal if it’s good for the United States and our workers and our great companies.”
The two countries are currently working to finalize the text of a phase one trade agreement, which is set to cover intellectual property (IP) protections and Chinese purchases of U.S. farm goods. It would ease tensions in a trade dispute spanning more than a year and involving tit-for-tat tariffs on billions of dollars worth of imports.
Trump said that if a deal couldn’t be struck, he would substantially raise U.S. tariffs on Chinese goods. “And that’s going to be true for other countries that mistreat us too.”
The United States currently has duties ranging from 15 percent to 25 percent on approximately $325 billion of Chinese goods, with tariffs of 15 percent on about $156 billion of Chinese products due to kick in on Dec. 15.
Reuters, citing unnamed U.S. officials, reported earlier this month that the December tariffs may be scrapped as part of the phase one trade deal.
Last week, China’s Commerce Ministry said a deal would include tariff rollbacks, but Trump later refuted the claim, saying he hasn’t agreed to such a proposal.
Trump said the administration has “taken the toughest-ever action to confront China’s trade abuses,” including what he described as China’s manipulation of the World Trade Organization (WTO).
“Since China’s entrance into the WTO in 2001, no one has manipulated numbers better or taken advantage of the United States more [than China].”
He added in jest: “And I won’t use this word ‘cheated.’ I will not say this word ‘cheated,’ but nobody’s cheated better than China. But I will not say that. We’ll say that off the record, okay?”
Cathy He and Reuters contributed to this report.
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