NDN Blog

This piece was originally published on Medium.

A year and a half before the Presidential election, Trump’s electoral position looks precarious to say the least. According to FiveThirtyEight, Trump currently stands at a net approval rate of -11.6, and he hasn’t been better than -8 since March of 2017. Of the 12 Presidents in office since 1945, only 1 has had a negative net approval rate at this point in their first term — Jimmy Carter — and we know how that turned out. By contrast, Obama was at +1.5 in May of 2011, and he went on to win in 2012 by the still relatively modest margin of 3.9 percentage points.

Crucially, and even worse for Trump, this extremely poor level of approval has taken place while the economy has been strong. By the 1980 election in which Carter lost by 8.3 percentage points, the economy had entered a recession and unemployment was near 8%. By contrast, Trump inherited an economy with 4.8% unemployment and job creation of over 210k/month, and that strength has largely continued to this point. What this means for Trump, however, is that he is probably getting the largest boost from the economy to his approval rate that he will get — that is to say, he is at his high water mark in the polls right now. Furthermore, as the economy weakens, it is likely that voters who approved of him primarily because of the economy will grow more likely to oppose him. It could be devastating to his electoral chances in 2020, therefore, that the economy seems to have begun a sharp deceleration over the past several months (something that the conventional wisdom is only now beginning to acknowledge).

First, the economy in the first quarter of this year was never close to as strong as was commonly assumed. This misconception was based upon two very strong headline reports (3.1% GDP growth and 3.6% unemployment) whose underlying data was actually quite poor. The headline GDP number came in strong because two temporary, one-off factors (inventories and net exports) gave big boosts to the economy in Q1. However, these boosts will not happen again for the rest of the year, and the fact that they were large in Q1 will actually cause them to subtract from growth in Q2-Q4 (as businesses reduce their inventories after a big build-up for example). In fact, the core components of GDP — consumption and business investment — grew at their slowest rate since 2013, illustrating that the fundamentals of the economy were weak. Similarly, the unemployment rate fell to its lowest level in 60 years in April not because more people were employed, but because 490,000 people dropped out of the labor force. According to the household survey that is used to calculate the unemployment rate, 103,000 fewer people were employed in April than in March, and 300,000 fewer people were employed in April than in December 2018.

Second, the deceleration in the economy has become very clear with the release of new economic data for April and May. Three key reports that look at the fundamentals of the economy — retail sales, industrial production, and business investment — all came in very weak in April. Retail sales, a good proxy for consumer spending, fell for the 3rd time in the past 5 months while industrial production grew at its slowest rate since February 2017. Capital spending, a good measurement of the level of investment by businesses, declined to its lowest overall level since June 2018. And this data was all compiled before Trump increased tariffs on $200 billion of Chinese goods from 10% to 25%, and threatened tariffs of 5% on all Mexican imports. This rapid escalation of Trump’s trade wars with China and Mexico starting in mid-May has clearly affected the economy, and has turned already weak April numbers into extremely poor May ones. For May as a whole, services activity fell to its lowest level since early 2016 while manufacturing activity cratered to levels not seen since 2009. Furthermore, job growth fell significantly, expanding by only 75,000 jobs in May compared to the 2014–18 average of 215,000 jobs per month. Finally, consumer confidence took a sharply negative u-turn after the imposition of the tariffs in mid-May, which will likely weaken consumer spending in the weeks ahead.

Overall, then, the economy has clearly taken a dramatic turn for the worse over the past few months, something that is now starting to be reflected by the conventional wisdom in the markets and media. The Atlanta Fed and New York Fed now project Q2 GDP growth to be an average of only 1.2%, while Goldman Sachs, JP Morgan, and Morgan Stanley see an average of just 0.9% growth. Similarly, the Fed’s preferred metric for forecasting recessions — the yield curve — is now at its flattest point (meaning the highest probability of recession) since 2007. And the economy is likely to only get worse in the coming weeks. The most important risk factor for a further deceleration is Trump’s trade wars, and conflicts with China, Mexico, and Europe all look unlikely to abate anytime soon. With China, negotiations have come to a complete standstill and Chinese state media has become far more hostile to the US in recent weeks, meaning that the chance of a deal is extremely unlikely. Furthermore, as of this morning the White House has said that Trump still intends to impose the 5% tariffs on Mexican imports, and the complete lack of progress in trade talks with the EU means that the chance of a 25% tariff on auto imports from the bloc is increasingly likely. As these conflicts continue unabated, the risk of a full-blown recession only increases. Indeed, Morgan Stanley’s economists last week forecast a global recession if Trump escalates his trade wars any further.

What does this mean for Trump and his chances of re-election in 2020? Very simply, it could mean that the President suffers a major defeat in 2020, if not an early primary challenge late this year. According to Ipsos polling from mid-May, Trump has a positive approval rate on just 2 out of 14 policy areas — his handling of the US economy (+5) and employment and jobs (+12). His average approval on the other 12 areas is -13, including -12 on healthcare, -12 on trade, -13 on taxation, and -11 on foreign policy. If the economy falters and his approval on those metrics falls in line with his broader popularity, the GOP could face a landslide defeat next year. As it is right now, Trump is the most unpopular first-term President in the postwar period, but depending upon his actions towards China, Mexico, and Europe over the next few months, things for him could get a whole lot worse.

Perhaps the most persistent myth in American politics today is that the President has some magical hold on voters in the Rust Belt, and that his anti-immigrant and protectionist policies would make it difficult for a Democrat to win there in 2020.  There has been enough polling now for us to conclude that at this point in the 2020 race, it is Trump not the Democrats who faces an uphill climb in the Rust Belt next year.  Let’s look at some numbers:

Michigan – A new Detroit News poll has Biden up over Trump 53-41, and other Democrats are posting strong numbers there as well.

Pennsylvania – A recent Quinnipiac University poll had Biden up over Trump by a similar spread, 53-42.  

Morning Consult has Trump’s approval in these states down 17-19 points net since early 2017.   This morning Axios reported that “Internal Trump polls have Biden substantially ahead in the Rust Belt." And there are even recent polls showing Biden leading Trump 48-44 in Texas, 49-44 in Arizona and 53-41 in North Carolina.

While it is still early in the Presidential race, a few observations about these numbers:

1) Trump’s trade and immigration policies are not working for him even in the Rust Belt, and we know they have caused him and the GOP brand significant harm in the heavily Mexican-American parts of the country.   Trump has had the worst poll numbers of any President at this point in their Presidency in the history of polling.  It's getting hard to avoid the conclusion that Trump as a political project is failing.

2) There is evidence now that Trumpism/illiberalism is causing voters to rethink important issues, and what might be considered a “backlash” is emerging here and in Europe.  When Trump and the GOP attacked the ACA in 2017, we saw a 23 plus jump in its standing (from 38-49 in April 2016 to 50-38 today), as if voters realized they had something valuable once someone threatened to take it away.  The same may be happening with the openness of our societies here and in Europe and the UK.  In 2018, the US handed Trump one of the worst midterm defeats of the past few decades, and the GOP’s losses in MI and PA were among the worst of any state in the nation.  In the 2019 European elections, the party which gained the most ground were the Liberals, a party associated with open trade and immigration and the European project.  Liberals saw similar gains in the UK.  The Greens, a party which also could be considered to be in direct opposition to Trump’s politics, also made important gains in Europe and the UK.  Here, in early 2019 polls the candidate most identified with “liberal internationalism,” Joe Biden, has large leads in both Democratic Primary and general election polls. 

It is also important to note that in Europe the combined forces of both the center-right and far right actually lost seats in the European Parliament, as did the far left.  We’ve also seen significant declines in the standing of Bernie Sanders here in the US, and Jeremy Corbyn in the UK, political leaders on the left who’ve historically been more skeptical of the global liberal order. 

3) Democrats are currently very pro-free trade and anti-tariff.  The notion of the Democratic Party as a protectionist party is not now and has never been true.  The current global order was imagined and championed by FDR and Truman.  NAFTA, the Uruguay Round, China’s ascension into the WTO, and the TPP were all advanced by Democratic Presidents.  Current Democratic voters are overwhelmingly in support of openness and America’s leadership in the world, and even specifically pro-free trade by very large margins (67-19 in favor of free trade, 77-15 against tariffs).

4) It is our hope that in coming days Democrats see trade as an opportunity and lean in, as we’ve argued they should be doing on immigration too.  The nation and the Democratic coalition is in favor of the openness of the modern world, but we need to make our case, not let Trump define the terms of the debate.   Dems should begin by far more forcefully rallying against the President’s dangerous tariffs, and then perhaps advocate for the US to rejoin TPP if we are able, and be open to the new NAFTA if improvements can be made.  But most importantly, Democrats should tie our advocacy for an open world, perhaps our Party’s most important legacy, with far greater investments in everyday people and their prospects.   Ideas like expanding the ACA, raising the minimum wage, hastening the transition to a post carbon world, creating a new Department of Jobs, Skills, and Economic Development should all be considered in tandem with modernizations of the global trade system.   Many good ideas are coming from the Democratic Presidential debate.  What that would mean in the short term for example would be to condition Dem support for the USMCA to a rollback of Trump's policies weakening the ACA, as the ACA is one of the most successful programs ever put into place to help workers navigate the challenges of a more competitive global economy; or tax hikes and full funding of a national infrastructure plan; or passing comprehensive immigration reform.  

This piece was originally published on May 1st, 2019 and was updated with the latest polling data on June 4th, 2019.

Since the midterm elections last November, perceptions of Trump's popularity have swung rapidly as highly visible controversies such as the government shutdown and the release of the Mueller Report and Barr Summary have unfolded. Over the next few weeks, I'll take a look at some interesting developments in the polling, including Trump's popularity, the Democratic presidential primary, and the general election in 2020, and will comment on important take-aways from the data.

To start, how popular is Trump right now? While much of the conventional wisdom still portrays the President as a strong figure, the reality is that he continues to be by far the most unpopular first-term President in the modern era. According to FiveThirtyEight, Trump today sits at a -11.7 net approval rate. How does this compare to previous Presidents? Firstly, the lowest net approval rate that either Obama or George W. Bush hit during their first 2.5 years in office was -3.5, so Trump is dramatically lower than his immediate predecessors. Secondly, looking at all 11 Presidents since 1953, net approval at this point in their first term averaged +21, so Trump is a full 30 net points worse than his predecessors (and this average isn't skewed by potential problems with polling several decades ago - the average net approval of just Obama, Clinton, and both Bushes at this point in their terms was +26.1). Finally, let's look at how often Presidents over the past 60 years have experienced the type of heightened disapproval that Trump sees today. From Eisenhower until Obama, looking only at the first 2.5 years of each President's first term, Presidential net approval has been at -10 or worse for a total of 100 days (or just 0.96% of the time). By contrast, Trump has been under -10 net approval for 721 days (or 83.3% of the time).

In the 2018 midterm elections, this dramatic level of disapproval (-10.4 net on November 8, 2018 compared to -11.7 today) led to Democrats winning the popular vote by the largest margin of any midterm since 1986. Also within that midterm victory was a significant rejection of Trump by almost all of the emerging demographic groups that will form an increasingly large share of the US electorate in years to come, especially non-white and young voters. This trend has only accelerated since election day. According to Civiqs polling data, Trump today has a -35 net approval rate among voters under age 35, and is -49 among Latino voters. Similarly, the Republican Party currently has a net favorability rate of -48 among under 35s and -65 among Latinos, whereas the Democratic Party is +2 among under 35s and +23 among Latinos. This represents an enormous decline since 2004, when George W. Bush actually won voters under 45 and lost Latino voters by only 9 points. 

While much of the media continues to hold up Trump as a powerful political figure who can conjure up electoral victories out of nothing, in fact he continues to be the most unpopular first-term president in over six decades and is leading Republicans down the path of the California GOP by ignoring those demographic groups that will over the next decade become more and more critical to winning elections.  Indeed, the future for Republicans in critical battleground states looks grim, with voters under 35 disapproving of Trump by a net 38 points in Pennsylvania and 22 points in Florida. Even in solid red states, Trump is losing the argument with the next generation of voters, with net approval among under 35s at -21 in Texas and -17 in Mississippi.

One of the great animating principles which drove the founding of America and the design of our government was the quest to curtail the power of a single person to determine the fate of the nation without reasonable deliberation and what we call checks and balances.   There is perhaps no more quintessentially American idea than this – that the President is not a sovereign, but a partner in governing the nation with Congress and the Judiciary; that he or she serves the people, not themselves; that we are a nation of laws, not men and women.

After more than two years of his Presidency, it just isn’t clear that Donald Trump agrees with this time worn American belief that the power of an executive in a democracy must be limited and checked.  At the core of Bob Mueller’s report to the American people are profound questions about Donald Trump’s willingness to trample democratic norms and laws, even openly working with a hostile foreign power to influence the outcome of an American election.  The President showers authoritarian strongmen like Putin, Kim, and Orban with praise, and denigrates our democratic allies.  In case after case – the unrelenting lying about everything, the refusal to divest from his businesses, the unilateral deployment of the military on US soil, the years of obstruction documented by Mueller and the unprecedented disregard for the oversight responsibilities of Congress, the many times the President’s policies have been stopped by US courts, the granting of security clearances over the objections of professional staff and the intelligence community, the wanton lawlessness of his Cabinet and staff, and the persistent invocation of emergency powers when no emergency exists (either the US economy is the best ever or we are in a national emergency, can’t be both) – the President has refused to abide by the laws and norms essential to making our democracy, or any democracy, work.  In many ways he has become the type of American leader our Founding Fathers tried so hard to prevent from ever occupying the White House. 

It is in this light that we must see, and ultimately challenge, the President’s use of tariffs with Mexico, China, and other nations in the world.  The way he is using them, without consulting Congress and by whimsically announcing and enacting them without public debate or deliberation, is simply outside any reasonable understanding of how our nation should be governed.  They are the actions of a tyrant, or a Mad King, not an American President.  They also, perhaps even more importantly, violate the entire theory of how the post WWII order, designed and built by the United States, was supposed to work.  Whimsical use of tariffs has been essentially outlawed or highly constrained in our global system, in ways similar to how we’ve approached chemical and nuclear weapons.  Their escalating use in the pre-war period led to world war, and leaders from around the world came together and designed a system which sought to eliminate their existence entirely.  The President’s repeated deployment of tariffs to achieve not just economic but political objectives is a clear break from the norms and laws of the modern world. 

What the President has done with his tariffs, Mexican and otherwise, is therefore both a clear betrayal of the American system of government, and of the system we designed and built for the world after WWII.  As many predicted, the tariffs are slowing global economic growth, slowing American growth, creating extraordinary tensions with our largest trading partners and most important geopolitical allies, and weakening the global system America built that has ushered in the most peaceful and prosperous period in all of human history.  Congress has a profound duty to step in now and stop this dangerous abuse of Presidential authority before more harm is done to the United States and the world.  It can begin by advancing a bicameral, bipartisan bill already introduced into Congress that is designed to reign in the President’s abuse of his tariff authorities. 

But Congress has an additional remedy it is considering now – impeachment and removal.  It is my own belief that if Congress does begin the process of removing the President, among the more persuasive arguments which will need to be made is Donald Trump’s historic abandonment of the democratic principles which have inspired the world and made America great.  Refusal to embrace those principles, flirting and encouraging autocratic whimsy rather than democratic deliberation, is perhaps the greatest crime an American President can commit, for it is a betrayal of our nation’s most important contribution to human kind – that it is the people who are sovereign, not Mad Kings and tyrants.  There is perhaps no greater rationale for the removal of a President than failure to maintain fidelity to our democratic system itself. 

For more on why Congress should be challenging the President’s tariffs see this recent series of essays from the NDN team. 

Over the past week, new economic data has painted a picture of a rapidly decelerating US economy. In April, industrial production grew at its slowest rate since February 2017, retail sales declined for the 3rd time in the past 5 months, and capital spending fell by 0.9% to its lowest overall level since June 2018. And this data was compiled before Trump increased tariffs on $200 billion of Chinese goods from 10% to 25%. Since then, the numbers have gotten even worse. In May, US manufacturing production fell to its lowest level in 9 years while overall business activity fell to its lowest level in 3 years. Meanwhile, growth projections for Q2 GDP have fallen rapidly, with the Atlanta Fed, the New York Fed, JP Morgan, and Morgan Stanley all seeing growth under 1.5% this quarter. Indeed, the Fed's preferred metric for forecasting recessions - the yield curve - is now at its flattest point (meaning the highest probability of recession) since 2009. Trump's trade war, and recent significant increase in tariffs, has played a large role in this slowdown. Export markets have dried up for American farmers and manufacturers, investment has declined as firms face significant uncertainty, and higher costs for consumers and producers alike have caused output to slow. You can find more of NDN's analysis on why the economy is currently worse than conventionally believed here. As well, you can read our work detailing the failures of the President's tax cut here and his trade policy here. 

Weekly Notes On The Economy is a weekly column that NDN writes on the most recent economic news, policy, and data.

In a weekend Twitter thread I did a deep dive on the results from the European elections: big turnout, gains for the Liberals and Greens, losses for the establishment left and right, and less power for European parties on the right. Support for the European project held, but the governing coalition will now be broader and more complicated, with the Liberals and Greens having much more influence than before.  ew voices and new politics will emerge now in Europe. 

One group who will not have more influence is the European far right.  Overall the center-right/far right parties saw their representation in the European Parliament drop from 49.5% to 46.7%. The three far right parties went from 21% to 23%, gains that were less than anticipated, and became only a bit more of a smaller and less powerful right-of-center pie.  Even in the UK it appears those voting for Remain outpolled those voting for Brexit, though things remain closely divided there. 

Loss of ground for the center-right/rfar right, and gains for Liberals and Greens, feels similar to what we are seeing here in the US. The GOP got beaten badly here in 2018, and Donald Trump is the weakest incumbent at this point in his Presidency in the history of polling - with no near peer.  President Trump would lose to Joe Biden by a large margin if the election were held today.  In the Democratic Party, we are seeing a huge rise in the import of countering climate change, and Dem voters hold very “liberal” views on immigration and trade, supporting free trade and opposing the President’s tariffs by wide margins.  Importantly, in Europe you did not see the rise of a far left to counter the rise of the far right – the party which gained the most ground was the Liberals, a centrist pro-EU alliance.  The far-left alliance actually lost ground in Europe, perhaps tracking the decline of the Labour Party in the UK and Bernie Sanders here in the US. 

As NDN has been arguing for months, the response of the center-left to the rise of a radical and dangerous far right politics here in the US has been something that feels far more like pragmatism than anything else. It's how we won the House back in 2018, how Pelosi is leading today, and in our own 2020 field, the politician most associated with that politics holds a commanding lead.  It isn't that the rise of AOC and are allies isn't important - it is.  But is our take that their influence and the Democratic Party's leftward drift has been exaggerated.  Consider that the Justice Democrats, her group, won only 7 of its 67 races in 2018; and that 40 of the 59 new House Democrats have joined the New Democrat Coalition, a group long associated with pro-market, pro-trade "liberal" politics. 

If your basic analysis is the radicalization of the other party has become dangerous, it would stand to reason you would be wary of embracing extremism in your own party. 

I would also posit the rise of the “Greens” here and in Europe is a pragmatic response, long overdue perhaps, to a serious global challenge and threat.  Fascinating to see the response to the perceived threat of Trumpism/Orbanism/Putinism to be a pro-globalist pragmatism and one working to hasten the arrival of a post-carbon world – both of these impulses seem very much in line with what is needed now, and ones that should worry the GOP about next year. 

Over the past year or so Simon has been making a big argument about the past and future of the center-left in America.  Called "Patriotism and Optimism," it makes the case that America is not in decline and is in fact doing as well as it has in any point in its history. It is meant to be an explicit rebuttal to the core argument Trump is making about America and its decline, an argument which is malevolently selling America and its people short every day. 

This primary way this argument has made itself into the world is through a 45 minute long Powerpoint deck, which has been seen in dozens of showings over the web and live in person to policy makers here in Washington and around the country. Our next showing of the deck will be Friday, June 21st from 12:00pm to 1:15pm at our new offices at 800 Maine Avenue SW, Washington, DC. Lunch will be served. You can RSVP for the event and learn more here. For background before the showing, feel free to check out some related readings below.

Key Background Readings On "Patriotism and Optimism"

The Case for Optimism: Rejecting Trump's Poisonous Pessimism, Simon Rosenberg, Medium, 6/2/17. In an essay that originally was published on Medium, Simon argues that the great rationale of Trump's Presidency  –  that America is in decline – simply isn't true, and must be challenged more forcefully.  This is the piece that spurred the creation of the presentation. 

Chin Up, Democrats, Simon Rosenberg, US News and World Report, 1/20/17. In his column Simon argues that Democrats should have pride in their historic accomplishments and optimism about the future of their politics. This one is very relevant to the presentation itself. 

A Center-Left Agenda for the Trump Era - Simon Rosenberg, US News and World Report, 12/9/16.  In the early days after Trump's election Simon layed out a possible agenda for the Democrats centering on prosperity, security, shoring up the American led liberal order and ambitiious efforts to reform our political system. 

Additional Readings

Some Thoughts On the Caravan - By Simon Rosenberg, Medium, 10/24/18.  The Caravan, composed of 7,000 poor, unarmed, mostly Honduran Central Americans, poses no threat to the US, and illegal border crossings continue to be way down. Some thoughts on what Democrats should do to respond to Trump's farcical attacks and terrible policies.

Are We Better Off Under Trump? The Short Answer Is No - By Simon Rosenberg and Chris Taylor, NDN, 10/18/18.  Most measures of the US economy are worse today than when Trump took office. Worse still, the President’s policies have made it very challenging to manage the next recession or global economic downturn.

Challenging Trump's Tariffs - An Ongoing Series - By Chris Taylor, 10/17/18.  In a new series challenging Trump's tariffs, we argue that the President's trade policy is illegal, recklessly ignorant, damaging to the US economy, and historically unpopular. Congress must step up and rescind them in the coming months. 

Trump's Immigration Strategy Is Failing - By Simon Rosenberg, NBC News, 8/6/18.  Almost nothing the President has done on immigration and the border has worked; expect more extreme policies as the elections approach. 

Congress Must Debate The Weakening of Global Order - By Simon Rosenberg, NBC News, 5/10/18.  Few presidents have inherited a world or a nation in which more was going right. Trump seems determined to undo it all.

The Pernicious Politics of Oil - Simon Rosenberg, US News and World Report, 12/16/16.  Petro-powers are challenging the global order, and the next president seems uninterested in stopping them.

An Enduring Legacy: The Democratic Party and Free and Open Trade - Simon Rosenberg, Huffington Post, 1/24/14.  The global system created by Presidents FDR and Truman has done more to create opportunity, reduce poverty and advance democracy than perhaps any other policies in history. 

In a post earlier this week I noted that Trump had experienced a very dramatic decline in his standing in Rasmussen, his favorite pollster, dropping from 51/47 (+4) to 44/54 (-10) over the past 3 weeks.  Nate Silver’s 538 has found similar slippage, as Trump has dropped from 42.7/52.4 (-9.7) to 41.1/53.8 (-12.7) in just the past 2 weeks.  It is just hard not to conclude at this point that Trump’s big play of the last few months – tariffs, global saber rattling, border chaos, burying Mueller – hasn’t worked, and in fact is in some way contributing to his rather abrupt decline.  I review all this data and the points made in the last graph below in a new post today.

The media has failed to capture how fundamentally unpopular Trump is right now, and how much trouble he is for re-election.  His unpopularity is unprecedented in modern American history.  In a study released by NDN a few weeks ago, we found that this point in their first term, all post war American presidents had:

- Net approval of + 22.5.  Today Trump’s is 12.7.  He is net 30 points below the average of all first term post war American Presidents at this point.

- 72 days at -10 or worse approval.  Trump has had more than 700 days at -10 plus so far in his Presidency, or ten times all other post war American Presidents combined.

Trump is even in trouble in MI/PA/WI, the 3 states most critical to his success in 2016.  The GOP was blown out in these states in 2018, and according to Morning Consult, Trump has lost between 15 and 19 pts net in favorability in all three.  A new poll has him trailing Joe Biden by 11 points in Pennsylvania.  His America First policies have pushed the heavily Mexican American parts of the country significantly towards the Democrats in the last two elections, almost certainly putting CO and NV out of play, and AZ and TX very much in play for the Democrats.  A recent poll in Arizona had Biden leading Trump by 5 there.  And if Texas is indeed in play, it will be $200-300m problem for Trump – no small thing.

Incumbents very rarely come back from where Trump is today.  His Presidency increasingly feels like a failed one, and many more days like today and it certainly will be.

This backgrounder pulls together our work looking at President Trump’s economic and trade policies. 

Democrats Must Demonstrate Greater Leadership In Challenging Trump's Ruinous Trade Policy - Simon Rosenberg, Twitter, 5/8/19 - Democrats should be more aggressive in challenging Trump’s tariffs and trade policies given the failure of those policies to achieve their objectives and growing discontent with them around the country.

Beyond The Headlines, The Economy Continues To Weaken - Chris Taylor, Medium, 5/7/19 - The new narrative that the economy is back to growing strongly is significantly flawed, and is largely based upon two economic reports whose headlines were very strong but whose underlying data revealed continued weakness in the economy.  

Weekly Notes On The Economy - Chris Taylor, NDN, 5/7/19 - Weekly Notes On The Economy is a weekly column that NDN writes on the most recent economic news, policy, and data.

Challenging Trump's Tariffs - An Ongoing Series - Chris Taylor, NDN, 2/14/19 - In a new series challenging Trump's tariffs, we argue that the President's trade policy is illegal, recklessly ignorant, damaging to the US economy, and historically unpopular. Congress must step up and rescind them this fall.

Trump's Tax Cuts Have Failed To Deliver On Their Promises - Chris Taylor, NDN, 10/30/18 - Trump’s tax cut promised to boost growth by strengthening the labor market and investment, but today both metrics look very similar to their pre-tax cut trend. Instead, the deficit has surged to unprecedented levels and rapidly increasing interest rates are hurting ordinary Americans.

This essay originally appeared on Medium.

Over the past two weeks, a new piece of conventional wisdom has taken hold in the media and the White House that the economy is strong again and concerns over growth earlier this year were unfounded. Indeed, Trump likely ordered a significant escalation of his trade war with China based upon his perception that the economy was doing well enough to handle it. The problem, of course, is that this narrative doesn't really appear to be true. It is largely based upon two economic reports whose headlines were very strong but whose underlying data revealed continued weakness in the economy. 

First, the unemployment rate in April hit its lowest level in five decades. While this headline sounds extremely positive, the reason unemployment fell was because 490,000 workers left the labor force after being unable to find jobs. According to the Census Bureau survey that the unemployment rate is derived from, total employment in April actually fell by over 100,000, and 300,000 fewer people have jobs today than they did in December 2018. 

Second, real GDP rose by 3.2% in the first quarter, far above market estimates in the low twos. Again, the report appears to be very strong, but the underlying data is actually poor. GDP rose significantly because of temporary, one-time boosts from inventories and net exports. The problem is that because these factors were very strong in Q1, they will actually subtract from growth in the rest of the year as firms reduce their inventory levels to deal with slowing demand and net exports fall after they had a large, one-time build-up ahead of the expected imposition of tariffs in March. Meanwhile, the core elements of growth that will affect GDP over the rest of the year, consumer spending and business investment, actually fell to their lowest levels since 2013 in Q1, meaning that growth will likely be around 2% or worse for the rest of the year.

Furthermore, closely-watched reports covering US manufacturing and services production saw major declines in April, consistent with the underlying data in the jobs and GDP reports. Last month, US manufacturing output declined to its lowest level since October 2016 and services production fell to its lowest level since August 2017, while the employment gauges in both reports were near their lowest levels of the past 2 years.

Rather than marking an unexpected uptick in the economy, data over the past month has only confirmed that economic activity continues to slow, as Trump's trade policy harms US manufacturers and farmers and his tax cut fails to provide the sustainable lift to investment that was promised. All of this makes his threats of additional tariffs against China more economically and politically risky, and we will continue to oppose these policies in the days ahead. 

Weekly Notes On The Economy is a weekly column that NDN writes on the most recent economic news, policy, and data.