According to a recent poll by Harvard-Harris, 57% of Americans would blame President Trump if the U.S. slid into a recession in the next year (see this article’s featured chart). Early on in the Trump presidency, some Democrats were touting the good economic numbers as Obama’s legacy – the previous U.S. president.
Now, the economy is showing some rough edges. For sure, it is now Trump’s economy. “It’s the economy, stupid,” a slogan James Carville coined as a campaign strategist of Bill Clinton’s successful 1992 presidential campaign against sitting president George H. W. Bush. So where are we at in terms of the U.S. economy ahead for the U.S. 2020 presidential elections?
There are rough patches in the economy (see inset chart). August 2019 job gains come in at 130,000, below expectations, though unemployment remains at historic lows – 3.7%. Looking around the globe, the PMIs (Purchasing Managers’ Index) in the major economies are at best stagnant. PMIs tend to lead the economy 6 to 12 months.
There are some potential positives. The U.S. and China will resume trade talks – so they say, but we have heard this before. Fed chair Powel was upbeat on U.S. economy, but still hints at a rate cut to boost the economy. The ECB is also weighing stimulus options to boost its ailing economy, which could reflect back positively to the U.S. economy with spillover effects.
So will the economy be Trump’s Achilles’ heel? News Forecasters previous forecast of the economy just prior to the 2020 election was, “if you like the economy today, you will like it then.” We will hold to this forecast, though as suggested in this past article – nothing is guaranteed, and there is always that Black Swan event. That being said, economic recession is starting to flash orange-ish.
When push comes to shove, Trump will buckle on the trade war with China to ensure the economy is stable prior to the election in 2020 – we have seen this before – click here. The Trump other plan is to push the Fed to cut rates – somewhat successful. News Forecasters keeps a close on the economic trends as it will be a key issue in the coming critical 2020 U.S. presidential elections.
A video presentation of this subject: