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Trump declares economic ‘boom’ underway as CBO sounds slowdown alarms

Congressional analysts predict slower GDP growth, lower labor force participation

Amazon hiked its minimum wage. That doesn’t mean Congress has to follow suit, Saltsman writes. (Mark Makela/Getty Images file photo)
Amazon hiked its minimum wage. That doesn’t mean Congress has to follow suit, Saltsman writes. (Mark Makela/Getty Images file photo)

Despite warning signs of an economic slowdown, President Donald Trump on Tuesday told an audience of wealthy and influential New York players that the U.S. economy is booming — almost exclusively because of his stewardship.

“Today, I am proud to stand before you as President to report that we have delivered on our promises — and exceeded our expectations. 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 a lunch hour address before the Economic Club of New York, the word “boom” in all capital letters on the White House-released excerpts.

But despite the president’s rosy assessment, some economic analysts point to a slowing economy.

Hours before Trump’s speech, the Congressional Budget Office released a series of projections, including higher unemployment and stable federal deficits — despite longstanding Republican opposition to Washington taking in more than it spends.

Still, Trump used part of his address Tuesday to again ding the Federal Reserve, saying its interest rates have hindered American competitiveness. 

“Give me some of that, give me some of that money, I want some of that money,” he said of negative interest rates. “Our Federal Reserve doesn’t let us do that. … We’re paying a much higher rate of interest.”

[Trump to host Turkey’s Erdogan same day public impeachment hearings start]

Of the 2020 Democratic presidential primary field, Trump said he intends to “let them keep talking” about their economic plans because he doubts voters will buy in, making his reelection “easier than I thought it would be.”

And Trump once again touted the unemployment rate, which has declined under his watch.

“Under my administration, 2 million prime-age Americans have come off of the sidelines and rejoined the labor force,” Trump said. “Over 1.1 million fewer Americans are now forced to rely on part-time work today than when I was elected. A record number of Americans are quitting the job they have to take a job they like even better.”

The president also invited “dictators” to “come on in” and make deals with U.S. firms. “Whatever is good for our people,” he said.

Unemployment rise forecast

Jeffrey F. Werling, CBO’s assistant director for macroeconomic analysis, predicts in the report that “the unemployment rate is expected to rise steadily, reaching and surpassing its natural rate of 4.5 percent in 2023 before settling into its long-term trend in later years.”

Werling and CBO also are forecasting the gross domestic product “is projected to grow faster than it has since the 2007-2009 recession but slower than it has in previous periods.” On the size of the labor force, the CBO analyst predicts the “participation rate is expected to respond more slowly to the projected slowdown in output growth.”

Given a chance to question Trump at the New York event, an audience member noted capital spending is down and several U.S. sectors have been hindered by his tariffs.

Trump responded: “They’re not down. … There is no uncertainty.” His long and meandering answer eventually evolved into a rant about taking on the Islamic State and U.S. forces recently conducting a mission that led to the death of its founder, Abu al-Baghdadi. 

[Road ahead: Public impeachment hearings begin]

Asked what he sees as the biggest threat to the U.S. economy, the president pointed to Democrats, saying “the election” is the biggest economic risk because the opposition party’s candidates have proposed policies that would hinder the energy and manufacturing sectors.

Rep. Emanuel Cleaver, D-Mo., sees trouble for Republicans in Trump’s economic message.

“If I were a Republican and advising the president … I would say, ‘Look, I know you don’t want to say this, but if you want to start inching into the support base of the Democrats, I would say something like, ‘Look, the economy was being rebuilt by my predecessor, and I have built on the success that he started, and, as a result, the unemployment numbers have dropped to historic lows,’” Cleaver told Fox News, referring to former President Barack Obama.

“I think that would be one step, and an important step,” he said, “in trying to get [rid of] all of the inartful comments that the president has made.”

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