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Published: Wednesday, October 30, 2019 @ 2:15 PM
— Hours after new numbers showed economic growth in the third quarter of this year dropping to under two percent in the U.S., the Federal Reserve on Thursday announced another cut in interest rates, amid hopes the rate cut will spur more economic activity.
New data from the Commerce Department showed annual economic growth slowing to 1.9 percent in the third quarter; it was 3 percent in the first quarter, and two percent in the second quarter of this year.
Earlier this year, the White House predicted those GDP growth numbers would stay at 3 percent or above - but that has not happened.
While consumer spending has remained strong, economic data shows business investment has declined.
Third interest rate cut of the year made by @federalreserve. Benchmark US interest rate lowered a quarter of a percentage point to a range of 1.5 to 1.75 percent.— Steve Herman (@W7VOA) October 30, 2019
WASHINGTON (AP) — Federal Reserve cuts rates for 3rd time this year but signals it will pause its rate reductions.— Zeke Miller (@ZekeJMiller) October 30, 2019
When President Trump took office in January of 2017, GDP was only at 1.2 percent in the first quarter of that year - but quickly increased to right around three percent.
The best quarter for growth under the Trump Administration was the second quarter of 2018, when it hit 4.2 percent.
The President has not been shy about publicly blaming the monetary policy of the Federal Reserve for growth figures which are below the forecasts from the White House.
"Not bad considering we have the very heavy weight of the Federal Reserve anchor wrapped around our neck," Mr. Trump tweeted in July, after the Commerce Department reported second quarter growth at 2.1 percent.
Q2 GDP Up 2.1% Not bad considering we have the very heavy weight of the Federal Reserve anchor wrapped around our neck. Almost no inflation. USA is set to Zoom!— Donald J. Trump (@realDonaldTrump) July 26, 2019
Today's GDP numbers show that strong economic growth benefits American families. Average annual growth in real disposable personal income under @realDonaldTrump is nearly double the pace from President Obama’s expansion period. https://t.co/1SdRKvx6GB pic.twitter.com/CGQOywtfqH— CEA (@WhiteHouseCEA) October 30, 2019
As for the overall health of the economy, the Fed reported Wednesday that it still believes 'the labor market remains strong and that economic activity has been rising at a moderate rate,' with low unemployment and low inflation helping as well.
But there were also signs the Fed did not like.
"Although household spending has been rising at a strong pace, business fixed investment and exports remain weak," the Fed statement said, noting 'uncertainties' about the economic forecast.
Some of those uncertainties have developed over the President's use of tariffs on imports from China, and the European Union.