The longest economic expansion in U.S. history is showing signs of cooling, and while the economy is still good, some polls show a challenge for President Trump’s reelection.
The superlative-loving president tweeted Wednesday that the U.S. has “the greatest economy anywhere in the world.”
The president points to the lowest unemployment rate in more than a half-century, a soaring stock market that reached a record high Wednesday, and companies expanding in the U.S. because of favorable tax and regulatory policies. The Dow Jones Industrial Average closed at a record 26,966, up 179 points.
“Even much of the Fake News is giving me credit for that!” Mr. Trump tweeted this week.
At the Group of 20 summit in Japan last weekend, Mr. Trump boasted to other world leaders, “We’re the hottest show in the world right now.”
The hotter the economy, the greater the challenge to keep the momentum going. And some indicators are showing parts of the U.S. economy easing amid concerns about Mr. Trump’s trade feuds and global stagnation.
U.S. manufacturers grew last month at the slowest pace in more than two years, according to a survey of executives. The Institute for Supply Management said its manufacturing index slipped to 51.7% in June from 52.1% in May, the third straight monthly decline. While the index shows that more companies are expanding than contracting, the survey is well below its 14-year peak of 60.8% in August 2018. The institute’s nonmanufacturing index of service companies, which make up more than 80% of the economy, also is at a two-year low.
The ADP employment report released Wednesday showed private-sector employers added a disappointing 102,000 jobs in June, fewer than the 140,000 that Wall Street expected.
Surveys of consumer sentiment also are showing some concern. The University of Michigan’s consumer sentiment survey last week showed that Americans’ expectations fell in June to 89.3, down from 93.5 in May. The Conference Board’s survey of consumer confidence reported an even sharper drop in June from the previous month.
The U.S. labor market also is showing signs of a slowdown, according to a report Tuesday from Glassdoor, an economic research firm. Job openings in the U.S. increased just 1.4% in June from the same period last year, while wages showed modest year-over-year growth of 1.7%.
Continued growth in jobs and wages “is a sign that the good times aren’t over yet,” Glassdoor senior economist Daniel Zhao said in a statement.
“But after a decadelong recovery, today’s labor market is sluggish,” he said.
Mr. Zhao predicted that Friday’s jobs report for June, following a disappointing 75,000 jobs added in May, will reflect a “slowing, but healthy, labor market.”
“Unemployment remains at historic lows, but the rate of employment and wage growth is slackening,” Mr. Zhao said. “We don’t foresee a dramatic worsening in Friday’s report, but the slowdown will likely continue.”
Others see signs of continued strong growth. About 76% of major publicly owned companies reported beating their expectations for the first quarter of the year, and the average rate on a 30-year fixed-rate mortgage has fallen to 3.73%, which should spur homebuying and increased consumer spending. Sales of existing homes rose in May, the first month this year in which sales rose from the previous month.
Also in May, average pay for the lowest one-quarter of workers surged 4.4% from a year earlier, the strongest wage growth of any group.
The Ag Economy Barometer at Purdue University reported Tuesday that producer sentiment rebounded in June, up 25 points to a reading of 126, amid a crop price rally and the Agriculture Department’s announcement of its $16 billion bailout program for farmers, along with Congress’ passage of a disaster aid bill. It also found that farmers were slightly more optimistic about a beneficial resolution of Mr. Trump’s trade war with China.
White House economic adviser Larry Kudlow said Wednesday that a new round of trade talks with China likely will begin within a week.
Most Americans believe the economy is still strong, but they are less inclined to thank Mr. Trump as he gears up for reelection.
Nearly two-thirds of Americans described the economy as “good” this week in an Associated Press-NORC Center for Public Affairs Research survey. But a smaller share, 47%, approved of Mr. Trump’s handling of the economy.
In a recent Quinnipiac University poll, 70% of voters said the nation’s economy is “excellent” or “good.” But only 41% of them said Mr. Trump deserves credit for it.
Trump campaign officials pointed to the president’s strong second-quarter fundraising, a combined $105 million between the campaign and the Republican National Committee, as proof that his supporters are grateful for his economic leadership.
“The mainstream media and Democrats refuse to give President Trump credit for our booming economy, but our massive fundraising numbers show the incredible strength of support for the president and his policies,” said campaign spokeswoman Sarah Matthews. “The U.S. economy is growing because President Trump cut taxes and is getting government out of the way. Record low unemployment, increases in wages and almost six million new jobs created are just a few examples of the positive effects Americans are experiencing under the Trump economy.”
She said Democrats “want to go back to the path which led to slow economic growth and our jobs leaving for overseas.”
The president, who has been calling on the Federal Reserve to cut interest rates, this week nominated Judy Shelton and Christopher Waller to the central bank’s Board of Governors. Ms. Shelton, a conservative economist who has served as an informal adviser to the president, has supported rate cuts and a return to the gold standard. Mr. Waller is director of research at the Federal Reserve Bank of St. Louis.
Mr. Trump has criticized the Fed for four rate increases last year, saying the moves impeded growth.
The president even suggested Wednesday that the U.S. should manipulate the dollar to gain a level playing field with China and Europe after accusing them of propping up their currencies.
“China and Europe playing big currency manipulation game and pumping money into their system in order to compete with USA,” Mr. Trump tweeted. “We should MATCH, or continue being the dummies who sit back and politely watch as other countries continue to play their games — as they have for many years!”
• Dave Boyer can be reached at dboyer@washingtontimes.com.
Please read our comment policy before commenting.