Recession signs worry Trump ahead of 2020
countries around the world.
Some of Trump’s closest advisers have urged him to lower the temperature of the trade dispute, fearing that further tariffs would only hurt American consumers and rattle the markets further. The president blinked once this week, delaying a set of tariffs in an effort to save Christmas sales.
Aides acknowledge it is unclear what steps the White House could take to stop a downturn. Trump’s 2017 tax cut proved so politically unpopular that many Republicans ran away from it during last year’s midterms. And a new stimulus spending program could spark intraparty fighting over big deficits.
The hope among administration officials is that a mix of wage gains and consumer spending will power growth through 2020. Yet Trump knows his own survival hinges on voters believing that he alone can prolong the economy’s decade-plus expansion.
“You have no choice but to vote for me because your 401(k), everything is going to be down the tubes,” the president said at a Thursday rally in New Hampshire. “Whether you love me or hate me, you’ve got to vote for me.”
Trump has spent much of the week at his New Jersey golf club, many of his mornings on the links, his afternoons watching cable television and his evenings calling confidants and business executives to get their take on the market’s volatility.
Though he has expressed private worries about Wall Street, he is also skeptical about some of the weaker economic indicators, wondering if the media and establishment figures are manipulating the data to make him look bad, according to two Republicans close to the White House.
His skepticism has been reinforced by White House officials who have long been inclined to only show Trump rosier economic assessments.
Amid the market turmoil this week, the president tweeted out defenses of his economic record.
He blasted the Fed for not cutting interest rates deeper, under the belief that sharper cuts would lead to more lending activity and make the U.S. dollar more competitive against foreign currencies. The president also highlighted the strength of consumer spending — as retail sales have jumped 3.4% from a year ago.
Yet his focus on the Fed may be counterproductive.
The Federal Reserve voted last month to trim rates for the first time since 2008, a step taken to insulate the economy against trade uncertainty. But consumers interpreted that as a precautionary move ahead of a downturn rather than as part of an effort to keep the economy growing, according to the University of Michigan’s consumer sentiment survey released Friday.
Consumer confidence has dropped 6.4% since July. The pessimism could worsen if the Fed decides to slash rates in accordance with Trump’s wishes.
One sector already suffering this year is manufacturing, the very industry that Trump pledged to revive and fortify with his tariffs. Factory output has fallen 0.5% during the past 12 months, the Fed said Thursday.