The Data Is In — and the Narrative Is Wrong

 The economic performance under Donald Trump's administration has led to differing interpretations among economists and journalists. This analysis discusses the key indicators supporting a positive view of the Trump economy, including consumer confidence, inflation rates, and employment figures.

1. Economic Growth Forecast

Analysts anticipate the U. S. economy will grow by 2.8% in 2026, contrary to many economists' predictions of only 2.0%. The likelihood of a recession in the next year has decreased from 30% to 20%.

2. Consumer Spending

Consumer spending has increased, suggesting confidence among Americans. Reports show a 0.3% rise in inflation-adjusted spending for two consecutive months, supported by wage growth and steady employment. Notably, discretionary spending on leisure activities has increased.

3. Savings Behavior

The personal savings rate dropped to 3.5%, the lowest since October 2022. This decrease indicates that consumers are confident enough to spend rather than save for emergencies, highlighting optimism about the economy’s future.

4. Labor Market Conditions

Job creation has averaged around 49,000 per month, which some view as insufficient; however, this number is aligned with new demographic realities. The "break-even employment" needed to maintain stable unemployment has decreased significantly from over 100,000 jobs to just 30,000-40,000 due to factors like retiring Baby Boomers.

5. Inflation Trends

Inflation rates are nearing the Federal Reserve's target of 2.0%. The personal consumption expenditure (PCE) price index rose only modestly, indicating manageable inflation pressures. Recent data shows a declining trend in both general and core inflation rates.

6. Future Economic Outlook

By factoring in potential tax cuts and other economic stimuli expected in 2026, projections suggest a more optimistic growth rate closer to 3.0% could reflect actual economic conditions rather than politically influenced forecasts.

Despite differing opinions on the economic situation during Trump's tenure, the combination of strong wage growth, increased consumer confidence, a healthy labor market, and manageable inflation indicates that the economic expansion may remain robust through 2026. The analysis suggests the consensus predictions could be underestimating the true economic landscape.

https://spectator.org/the-data-is-in-and-the-narrative-is-wrong/