Trump says 'economy is great' - then manufacturing numbers hit their lowest in a decade
President Donald Trump is upbeat, no matter what the economists and doomsayers are saying. He doesn't care if 3 out of 4 experts say the United States is headed towards a recession by 2021. To him that just means that he has a good 1 in 4 chance to make things work.
If only things were that easy.
Trump said this morning that "the economy is doing really well." He says this pretty much all the time, and he likes to cherry-pick the numbers to make it seem like things are better than they actually are. Even after the stock market was tanking after its worst day of the year, Trump pointed to how well WalMart was doing as an indicator of the overall health of the country. That was a first, even for him.
The funny thing about today is that Trump is continuing to talk about how well the economy is doing even as reports are being released showing real problems and the exact opposite.
According to CNBC, U.S. manufacturer growth slowed to the lowest level in almost 10 years in August. That's a major red flag.
The U.S. manufacturing PMI (purchasing managers’ index) was 49.9 in August, down from 50.4 in July and below the neutral 50.0 threshold for the first time since September 2009, according to IHS Markit.
At that point former President Barack Obama was still cleaning up George W. Bush's mess. He had only been president for eight months.
“Manufacturing companies continued to feel the impact of slowing global economic conditions,” Tim Moore, economics associate director at Markit, said in a statement Thursday. “August’s survey data provides a clear signal that economic growth has continued to soften in the third quarter.”
PMI readings are important because they generally indicate where the economy is headed.
“The most concerning aspect of the latest data is a slowdown in new business growth to its weakest in a decade, driven by a sharp loss of momentum across the service sector,” Moore said. “Survey respondents commented on a headwind from subdued corporate spending as softer growth expectations at home and internationally encouraged tighter budget setting.”
Trump is in the tough position of not fully knowing how to adjust his 2020 re-election campaign if the economy does indeed crash. That would be disastrous for him even with his own base.
Trump admitted that he has thought about the possibility of decreasing payroll taxes in order to make up for some of the economic losses average Americans are feeling. But, he says, all of this is necessary in order to combat China.