Loading ...Trump’s Economy Is Still Waiting for the Tax-Cut Boost.
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The U.S. economy is beginning the year with a downshift in growth despite $1.5 trillion in tax cuts signed by President Donald Trump in December.
Unexpectedly weak February retail sales pushed down forecasts for the annualized pace of expansion in the first quarter, with the Federal Reserve Bank of Atlanta’s GDPNow tracking estimate at 1.8 percent on Friday, cut from 2.5 percent a week earlier. Economists at Goldman Sachs Group Inc., JPMorgan Chase & Co., Morgan Stanley and Moody’s Analytics all lowered their estimates to 2 percent or less this week.
“There has been a general downward drift and the quarter is looking a little softer than expected,” said Ethan Harris, head of global economics research at Bank of America Merrill Lynch in New York. “The effects of the tax cuts build very slowly as the year unfolds. We need more time for the fiscal stimulus to show up.”
This quarter nonetheless is shaping up as a disappointment for the Trump administration, which has hailed a new era of growth after the president signed the tax overhaul.