The Trump administration’s top economist, Kevin Hassett, claimed victory in hitting President Trump’s 3 percent growth target Thursday after the release of new government growth figures.
Hassett, the chairman of the president’s Council of Economic Advisers, also said that the administration will promise even higher growth in 2019. He predicted that the economy would grow 3.2 percent in 2019, slightly higher than the comparable 3.1 percent figure for 2018 reported Thursday.
The Bureau of Economic Analysis said Thursday that GDP, the standard measure of economic output, grew 2.9 percent in 2018, measuring based on a weighted average of quarterly growth.
Measured a different way, though — comparing the fourth quarter of 2018 to the fourth quarter of 2017 — GDP grew 3.1 percent. Based on that figure, Hassett argued that the administration achieved its goal of 3 percent annual economic growth.
“If the question is what happened to [gross domestic product] in 2018 the answer is 3.1 [percent growth],” Hassett told the Washington Examiner in an interview.
Hassett asserted that the 2.9 percent figure was not the right one to use. “The year-over-year number was below 3 because of 2017 stuff,” said Hassett.
Hassett also boasted that the 3.1 percent fourth quarter-to-fourth quarter GDP figure was exactly what the most recent White House budget projected.
Hassett’s argument received support on social media from former Obama CEA chairman Jason Furman. Furman agreed Thursday that the figure showing 3.1 percent growth was the correct one to use.
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A solid 2.6% GDP growth rate for Q4 brings the headline annual average growth rate for 2018 to 2.9% (or 3.1% for Q4/Q4 which is a better measure of how the economy actually performed in 2018).
— Jason Furman (@jasonfurman) February 28, 2019
Furman, though, also commented on Twitter that he did not think the pace would last, saying that effects from tax cuts enacted in 2017 would not be as strong in subsequent years.
But in Hassett’s view, the administration’s efforts in other economic areas would help sustain and strengthen current economic growth.
“We’re also continuing to deregulate, which is going to be feeding growth, especially for small businesses,” said Hassett. He pointed to strong business investment, as well as the administration’s efforts on taxes and trade, as reasons to think economic growth would be stronger in 2019. “The reason people are investing more is they are more optimistic about the longer term outlook, and they are more optimistic because … we are no longer a higher tax jurisdiction,” he said.
