WASHINGTON — In the final sprint to Election Day, President Donald Trump is gearing up to tout an expected surge in third-quarter economic growth as evidence of “the great American comeback” in the hope of snatching another come-from-behind victory.
Trump Facebook ads launched this week but currently set as inactive plug the “FASTEST GDP GROWTH IN HISTORY,” with triumphant images of the president. “Thanks to President Trump’s bold action and strong leadership the US economy is only going UP!” one of the ads says.
Trump has also previewed the message on Twitter in recent days, saying the economy is “ready to set new records” and adding: “Big GDP projected.” It comes as third-quarter gross domestic product figures are expected to be released Thursday, just five days before the final day of voting in the election.
The number is projected to be historic: Economists expect GDP to increase by about 25 percent to 30 percent. And Trump is likely to take full credit for the growth and use it as his final pitch to persuade voters that the country is fully on the mend with a V-shape recovery.
But the reality is more complicated. The economy was recovering from a 31.4 percent drop in the previous quarter, the worst decline ever recorded, amid mass stay-at-home orders. And experts say the path to fully making up the losses is rocky — particularly with coronavirus case numbers rising faster than ever before in the U.S. and a lack of a stimulus package.
“While the third-quarter bounce in GDP will be a record quarterly gain, it isn’t all that impressive, as it follows the collapse in economic activity in the second quarter,” said economist Mark Zandi, who added that “even with the third-quarter gain, real GDP will have only recovered about two-thirds of what was lost in the second-quarter free fall.”
The economy is poised to grow, as consumer spending was up over the summer, with more people out and about than in the previous months, when the country was largely locked down. Auto and housing markets have also improved as people move out of cities and buy homes and cars to get around instead of take public transportation.
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But a lack of new stimulus from Congress means more people will fall into poverty, more businesses will close and more Americans will get evicted in the coming months. The third-quarter growth was fueled by unemployment checks, small-business loans and direct payments, none of which have been replenished for the fourth quarter.
Democratic presidential nominee Joe Biden has called it a “K-shaped” recovery that’s good for upper earners and bad for low-income workers. He has faulted Trump’s handling of the pandemic, arguing that the economic fallout would be less severe if he had listened to scientists about public health policy and if he had struck a deal with Congress for additional relief.
“Donald Trump squandered the strong economy he inherited from the Obama-Biden Administration, becoming the worst jobs president since the Great Depression,” said Biden campaign spokesman Andrew Bates. He said Trump’s refusal to “take the pandemic seriously” means the “economy is stalling out right now as layoffs rise and infections surge.”
Americans narrowly approve of Trump’s handling of the economy and widely disapprove of his response to the coronavirus, according to polling averages tracked by RealClearPolitics. The economy is a rare issue on which battleground state polls show Trump holding an edge over Biden.
Trump’s claims that the economy is ready to be the “best ever” could have a ring of truth for one group of people: college graduates who are comfortably working from home. Those Americans are saving money on commuting, meals and entertainment expenses. Some who are invested in markets have seen their portfolios appreciate as the Federal Reserve buys large amounts of securities.
But millions of Americans remain unemployed, with dim prospects. Many have been unable to pay rent or mortgages. Large numbers of Americans have been laid off or have had their hours reduced. Millions cannot afford to eat as food insecurity rises.
Big businesses are still announcing large layoffs every week. This week, Disney announced more layoffs, and New York’s Metropolitan Transit Authority said that without more help, it would cut up to 8,000 jobs in 2021. At the same time, job growth is slowing, and weekly unemployment numbers are still high.
Rising coronavirus case numbers have caused some states to enact more restrictions. And the coming winter could hit small businesses hard, especially restaurants.
Some Republicans doubt that Trump’s message will be a game changer.
“With the virus surging again and much of the country still locked down, no one in America is happy with the economy right now — no matter what the statistics say,” said Michael Steel, a consultant who worked for Jeb Bush’s 2016 presidential campaign and for former House Speaker John Boehner, R-Ohio.