State of Economy and Taxes was the headline in President Trump’s recent State of the union speech. While the economy was the centerpiece of the speech, he also touched upon the Tax Cuts and Jobs Act, and its impact on the economy. While his administration has often been mired in controversy on other issues the country’s economic gains last year give the White House something to crow about–and campaign on heading into next year’s presidential election. At the same time, Mr. Trump has also taken economic policy in unorthodox– and sometimes unpredictable–directions as he has in challenging China and even longstanding American allies on trade. Here are some key measures of the economy’s performance, the state of economy and taxes.
The economy grew at the fastest rate in 13 years. GDP growth for 2018 is estimated to be hear 3 percent–the target that the president’s economic team has set as a benchmark for success. While the government is still finalizing estimates for economic growth last year, most economists, as well as the Federal Reserve, project it at roughly 3 percent–that would be the fastest rate since 2005. Most experts also think that economic growth peaked in late 2018 and is now slowing to a moderate, though still respectable pace. GDP is an important gauge of economic growth, but for individuals it tends to matter a lot less than whether they can find gainful employment. So how is the labor market doing ?
Job creation has been strong by any metric. Employers added 2.4 million jobs in 2018, the strongest pace for hiring since 2015. The unemployment rates for African-Americans and Latinos while near record lows, rose slightly in recent months to 7.1 percent and 4.9 percent respectively. The black unemployment rate is double the rate for white Americans. The last time unemployment was below 4 percent, as it is now, was in 2000. Still, the labor market isn’t perfect. Nearly 40 percent of the adult population isn’t working-that’s much higher than it’s been in previous expansions.