President Donald Trump has overseen a historic economic expansion — which turns 10 years old next week — but signs of a slowdown are on the horizon as he seeks a second term.
Weaker job growth, reduced manufacturing activity and hints that the Federal Reserve could cut interest rates all suggest a recession could complicate his re-election bid, especially if he continues pushing trade wars, reported Politico.
“The economy has been a tailwind for him, but by Election Day next year it will at best no longer be blowing,” said Mark Zandi, chief economist at Moody’s Analytics. “There is a reasonable probability that he will be facing an economic headwind for re-election with growth slowing to the point that unemployment is starting to rise next year, though a lot depends on what he does with the trade wars and what the Fed does in response.”
Voters tend to finalize their assessment of a president’s economic performance months before the election, so he may be able to buy enough time if the Fed gives him the interest rate cuts he wants.
But he might be better off getting a shallow recession over with now, so growth can happen well ahead of the election.
“If there is going to be a recession, it’s probably good to get it over early,” said Karlyn Bowman, polling analyst at the American Enterprise Institute. “His marks on handling the economy and jobs are just about the only positive marks he has.”