Axios
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Trump's golden age reality check
The Trump administration's promises of a new economic golden age with 6% growth have not materialized. Current economic growth is significantly slower, around 1.5% to 2%, which is close to the long-term trend and well below ambitious targets. This discrepancy is illustrated by economists' skepticism towards projected high growth rates, citing a lack of visible productivity booms. Despite strong consumer spending and AI investment, tariff uncertainty and inflation have impacted the economic outlook. Consequently, public sentiment is shifting, with Americans now favoring Democrats on economic policy for the first time in a decade. While the economy has shown resilience, exceeding some expectations, the dramatic acceleration touted by the administration has not occurred. Official projections, like Commerce Secretary Lutnick's and economist Hassett's predictions of 5-6% growth, have not been met. The Congressional Budget Office projects a more modest potential GDP growth of around 2% annually. Some economists, like former advisor Lavorgna, argue that underlying demand, excluding volatile factors, shows robustness. The White House points to resilient consumer spending and industrial base restoration, while acknowledging potential data lags. Early "nowcasts" for the current quarter suggest a strong growth rebound, but economists caution these are preliminary and subject to revision. Achieving significantly higher growth rates without inflation would necessitate a substantial productivity boost, which current dynamics do not suggest.