The most recent report on U.S. third-quarter gross domestic product (GDP) growth estimates that the U.S. economy rose by 3.3% year over year. President Donald Trump sees no reason that growth won’t nearly double to 6%.
In remarks to at a Wednesday meeting of his cabinet, the president said, “So, we’re at 3.3% GDP. I see no reason why we don’t go to 4%, 5%, and even 6%.” His optimism may be thrilling, but if history is any guide, that optimism is more likely wishful thinking.
Most estimates of U.S. economic growth are forecasting rates of around 2%. The Congressional Joint Committee on Taxation (JCT) has projected the GOP tax plan, if passed, will add about 0.8% to the current forecast for GDP growth. The historical average over the past 30-years is around 2.5% and the last time U.S. GDP grew by 6% was 1984.
The president’s 6% figure is actually lower than the numbers he tossed around in an August speech in Missouri. According to CNBC the president told his audience:
In the last 10 years, our economy has grown at only around 2 percent a year. You look at other countries and you look at what their (gross domestic product) is, they’re unhappy when it’s 7, 8, 9 [percent].
And I speak to them, leaders of the countries, how are you doing? ‘Not well, not well.’ ‘Why?’ ‘GDP is down to 7 percent.’ And I’m saying, ‘We’re hitting 1 percent.’
CNBC did a little fact-checking and found just seven countries with annual GDP growth rates of 7% or more in 2016. Here’s the list, along with the GDP and the annual GDP growth rate:
- Nauru: GDP of $110 million; 10.4% growth rate
- Iraq: GDP of $192.7 billion; 10.1% growth
- Ethiopia: GDP of $79.7 billion; 8.0% growth
- Uzbekistan: GDP of $67.5 billion; 7.8% growth
- Côte d’Ivoire: GDP of $39.9 billion; 7.5% growth
- Iceland: GDP of $24.85 billion; 7.2% growth
- Cambodia: GDP of $22.3 billion; 7.0% growth
Excepting Iraq, how likely is it that Trump called the leaders of any of the other six?
For the record, U.S. GDP in 2016 totaled $19.4 trillion, of which 2% is equal to about $388 billion.
24/7 Wall St.Take This Retirement Quiz To Get Matched With A Financial Advisor (Sponsored)
Take the quiz below to get matched with a financial advisor today.
Each advisor has been vetted by SmartAsset and is held to a fiduciary standard to act in your best interests.
Here’s how it works:
1. Answer SmartAsset advisor match quiz
2. Review your pre-screened matches at your leisure. Check out the
advisors’ profiles.
3. Speak with advisors at no cost to you. Have an introductory call on the phone or introduction in person and choose whom to work with in the future
Take the retirement quiz right here.
Thank you for reading! Have some feedback for us?
Contact the 24/7 Wall St. editorial team.
Editors' Picks
