Either the media and Democrat elected (and hopefuls) were wrong about the economic impacts of the partial government shutdown that ended in January, or the U.S. economy is even stronger than it looks. Knowing the doomsaying that takes place regarding the Trump economy, the answer is most likely both.
GDP grew at an astounding 3.2 percent rate during the First Quarter of 2019, which even MSNBC called “extraordinary.” It’s even more shocking when you consider that the shutdown, which lasted nearly until the end of January, was projected to reduce growth significantly.
According to Forbes, the Trump administration’s own estimates suggested that the shutdown would reduce growth by about 0.13 percentage points for each week that it continued. Based on that figure, the shutdown should have resulted in First Quarter GDP growth coming in about 0.4 percent lower than it otherwise would have.
The left predicted that the shutdown would exacerbate other factors that they expected to be a drag on the economy, warning that we could soon witness “an end to growth.” CNN even claimed that, unlike previous shutdowns, the most recent one could result in lost economic activity that “America will never get back.”
Instead, economic growth beat economists’ expectations by nearly a full percentage point in the First Quarter, actually outpacing the previous quarter.
Obviously, the liberal media and political establishment got something very, very wrong.
The most charitable explanation for this discrepancy is simply that mainstream media journalists are so deeply invested in their flawed ideology that they believe their own spin about the “multiplier effect” of government spending. If one assumes that every dollar of government spending adds $1.45 to GDP, then any reduction in government spending is worrisome, and even a partial shutdown seems like a travesty.
The economic data, however, are based on facts, not theories and speculation, and the economic data strongly suggest that the shutdown did little to impede America’s ongoing economic expansion.
In addition to the impressive GDP growth, consumer spending increased by the largest amount in nearly a decade in March, and the stock market recently reached record-highs. Those numbers are particularly impressive given that inflation remains historically low, indicating that we are currently enjoying a “Goldilocks” economy.
Of course, it’s also possible that the economy’s robust performance just masked the impact of the shutdown, but that would be even more problematic for the media narrative about the economy. In fact, if the economic impacts of the shutdown really were as significant as advertised, then Q1 GDP growth would have been closer to 3.6 percent.
Left-leaning pundits have been warning for months that the economy will soon slow down significantly before lapsing into a recession ahead of the 2020 presidential election. A 3.2 percent growth rate in the First Quarter is damaging enough to their credibility on that front; a 3.6 percent growth rate would be positively devastating.
To make matters worse for the Trump-bashing media, the First Quarter is often the worst quarter of the year for economic growth, as President Trump pointed out in a tweet on Friday. With no new government shutdown looming in the Second Quarter, the economic numbers could easily improve even further as the year goes on.
Next time you hear predictions about the economy from the mainstream media, it’s probably safest to assume that the opposite is likely true. In the case of the First Quarter of 2019, the left’s prediction of doom because of the partial government shutdown in January was dead wrong and this Trump economy keeps on booming with no end in sight.
Eric Thomas Bolling is an American television personality, conservative political commentator, bestselling author, and financial commentator.