During the campaign, Donald Trump blasted the performance of the economy under President Barack Obama and promised that, if elected, he would achieve 4 percent annual GDP growth—a rate that most economists view as unrealistic.
The president-elect will soon get his chance to prove the skeptics wrong. And he will have a running start, inheriting an improving economy.
On Tuesday, the Commerce Department released its second of three estimates of third-quarter GDP growth. It showed the U.S. economy expanded at a 3.2 percent annual rate—up from an initial estimate of 2.9 percent.
The nation’s economy now has grown in every quarter but two since the end of the Great Recession in 2009, and its trajectory since the first quarter of this year has been sharply upward.
On Wednesday, the government delivered more good news. Americans’ incomes increased 0.6 percent in October, the best showing since spring and better than economists’ estimates.
This report follows recent estimates of personal income in 2015 at the metropolitan level. It grew in 2,552 of 3,113 counties nationwide, with an average increase of 4.7 percent. The Rochester area matched that growth; a year earlier, personal income here rose at less than half the national average.
Another positive note for this region: In October, it added both nonfarm and private-sector jobs.
For the U.S. economy, a key factor in its robust third-quarter GDP gain was exports, which grew 10 percent and added nearly a full percentage point to overall growth. Where exports go from here remains to be seen, especially because Mr. Trump’s stance on trade could prove disruptive.
Indeed, the president-elect’s policies in a number of areas could have a significant impact on the economy—both positive and negative.
Due to its slow start in 2016, full-year growth is likely to be so-so—around 1.5 percent, compared with 2.6 percent last year, which was the fastest annual pace since the recovery began. But there’s real momentum heading into 2017. Mr. Trump needs to make the right moves to maintain it.
12/2/2016 (c) 2016 Rochester Business Journal. To obtain permission to reprint this article, call 585-546-8303 or email email@example.com.