GDP growth slows in second quarter, missing Trump’s 3 percent target

US economic growth in 2018 missed the Trump administration’s 3 percent target by any measure, which could renew criticism🅷 of the White House’s $1.5 trillion in tax cuts.

The Commerce Department said on Friday that gross domestic product increased at a 2.9 percent rate last year, confirming an estimate which was published in March. The department’s annual revisions to GD♏P data also showed the economy growing 2.5 percent in the 12 months through the fourth quarter of 2018, down from the previously reported 3.0 percent.

President Donald Trump had highlighted the year-on-year growth figure asℱ proof that the tax cuts and a government 🔴spending blitz, which have helped to swell the federal government deficit, had put the economy on a sustainable path of strong growth.

The White House and Republicans have argued that the massive tax cuts, which included slashing the c꧟orporate tax rate to 21 percent from 35 percent, would pay for themselves through strong economic growth. Democrats assailed ꧟the tax cuts as benefiting wealthy Americans at the expense of the middle-class.

The updated GDP data, and signs that the economy shifted into lower gear🌠 in the second quarter after receiving a boost from exports and an accumulation of unsold goods in the 𓃲first three months of 2019, are undercutting that argument.

Trump likes to showcase the economy as one of the biggest achieveme🔯nts of his first term in office, declaring last July that his administration had “accomplished an economic turnaround of historic proportions.” On the campaign trail, Trump boasted he could boost annual GDP gro💃wth to 4%.

The downgrade to the 2018 year-on-year measure to below 3 percent may well irk a commander-in-chief who has been quick to blame the U.S. Federal Reserve in particular for actions he sees as stymieing his growth agenda. The Fed meets on interest rates next week, and Trump has already been jawboning policymakers to cut borrowing costs, which he says would allow the economy to take off “like a rocket ship.”

Economists, though, have long cautioned🍌 that the 3% growth target was unrealistic, given low productivity among other factors. Economists estimate the economy’s growth potential, or the pace at which it can expand without gene༒rating too much inflation, at around 2 percent.

An alternative measure of economic g🌜rowth, gross domestic income (GDI), rose 2.5 percent in 2018. The average of GDP and GDI, also referred to as gross domestic output and consider꧅ed a better measure of economic activity, increased 2.7% in 2018.

The updated Commerce Department data al♔so showed growth in the second and third quarters of last year was ♌not as robust as previously estimated, and the economy grew much more slowly in the fourth quarter than had been reported in March.

Still, tﷺhe economy’s performance in 2018 was an acceleration from the 2.4 percent growth notched in 2017. It matched the performance in 2015 during the Obama administration. The economy grew 2.8 percent in the 12 months through the fourth quarter of 2017.

The data also showed growth in consumer spending peaking in the🌱 second quarter and decelerat🃏ing sharply in the final three months of 2018.

Growth in the first quarter of 2018 was revised up to a 2.5 percent annualized rate from 2.2 percent. Second-quarter growth, which prompted Trump’s mission accomplished declaration, was cut to a 3.5 percent pace from a 4.2 percent rate. Growth in the third quarter was slashed to a 2.9 percent rate f⛦rom a 3.4 percent pace. Fourth-quarter GDP growth was lowered to a 1.1 percent pace from a 2.2 percent rate.

The downward revisions to t✨he three quarters largely refleꦓcted downgrades to business investment, suggesting corporations likely did not plow their tax windfall back into their businesses. Some companies like Apple used their windfall for share buybacks.