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Trump said he would revive the US economy. Here's how those pledges held up in 2019. | Markets – Business Insider

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REUTERS/Carlos Barria

  • A flurry of populist economic promises helped propel President Donald Trump to the White House in 2016.
  • Nearly three years later, the record-long expansion has cooled but held up better than expected.
  • Here’s how some of his top pledges on the economy held up in 2019.
  • Visit Business Insider’s homepage for more stories.

A flurry of populist economic promises helped propel President Donald Trump to the White House in 2016.

Nearly three years later, the record-long expansion has cooled but held up better than expected. Business Insider investigated how some of his top pledges on the economy held up in 2019.



Gross domestic product

AP Photo/Evan Vucci

The White House Council of Economic Advisers predicted that growth would top 3% for every year that Trump was in office. While growth has held up better than predicted, particularly after tax cut effects faded and trade tensions rose, that hasn’t happened so far.

In the first three quarters of 2019, gross domestic product held up better than economists had predicted. The results of the last three months aren’t out yet, but economists are all but certain that annual growth will be far closer to 2%.



Federal budget

AP Photo/Jacquelyn Martin

Trump famously vowed as a candidate to pay off the national debt within eight years. But red ink has continued to flow at a record pace under the Trump administration.

In the 2019 fiscal year, the national deficit swelled to its highest level in seven years at $984 billion. The last time it was that high, Washington was dealing with the aftermath of the Great Recession.



Trade deals

AP Photo/Susan Walsh

Trump has long promised to overhaul the global trade system in an attempt to benefit American workers he said have been put at a disadvantage by globalization. In 2019, he escalated tariff fights with China and several US allies.

Near the end of the year, Trump declared victory from those efforts as China announced it would commit to increased agricultural purchases, tighter protections for intellectual property, and other economic changes as part of an agreement to defuse tensions.

Separately, the White House gained support from Democrats for its signature rewrite of the North American Free Trade Agreement.

The pact marked a major legislative accomplishment for Trump, who called NAFTA the “worst” trade deal in history. The revised pact includes stricter rules on manufacturing origins and labor rules, but is expected to have a modest or slightly negative impact on the economy.



Jobs

AP

The US labor market has continued to hum under Trump. Throughout his presidency, the rate of job creation has largely kept in line with population growth.

In 2019, the unemployment rate held near a half-century low for much of the year. It consistently registered at or below 4%.



Manufacturing

Jeff Swensen / Stringer

Trump won over Rust Belt states on the back of promises to revive the manufacturing sector.

American factory activity picked up in the first year of his administration. But activity has fallen sharply over the past two years as tariffs levied by the president exacerbate a broader slowdown in factory activity. In 2019, the sector fell into a mild recession.


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Economy

Canadian retail sales slide in April, May as COVID-19 shutdown bites

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december retail sales

Canadian retail sales plunged in April and May, as shops and other businesses were shuttered amid a third wave of COVID-19 infections, Statistics Canada data showed on Wednesday.

Retail trade fell 5.7% in April, the sharpest decline in a year, missing analyst forecasts of a 5.0% drop. In a preliminary estimate, Statscan said May retail sales likely fell by 3.2% as store closures dragged on.

“April showers brought no May flowers for Canadian retailers this year,” Royce Mendes, senior economist at CIBC Capital Markets, said in a note.

Statscan said that 5.0% of retailers were closed at some point in April. The average length of the closure was one day, it said, citing respondent feedback.

Sales decreased in nine of the 11 subsectors, while core sales, which exclude gasoline stations and motor vehicles, were down 7.6% in April.

Clothing and accessory store sales fell 28.6%, with sales at building material and garden equipment stores falling for the first time in nine months, by 10.4%.

“These results continue to suggest that the Bank of Canada is too optimistic on the growth outlook for the second quarter, even if there is a solid rebound occurring now in June,” Mendes said.

The central bank said in April that it expects Canada’s economy to grow 6.5% in 2021 and signaled interest rates could begin to rise in the second half of 2022.

The Canadian dollar held on to earlier gains after the data, trading up 0.3% at 1.2271 to the greenback, or 81.49 U.S. cents.

(Reporting by Julie Gordon in Ottawa, additional reporting by Fergal Smith in Toronto, editing by Alexander Smith)

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Economy

Canadian dollar notches a 6-day high

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Canadian dollar

The Canadian dollar strengthened for a third day against its U.S. counterpart on Wednesday, as oil prices rose and Federal Reserve Chair Jerome Powell reassured markets that the central bank is not rushing to hike rates.

Markets were rattled last week when the Fed shifted to more hawkish guidance. But Powell on Tuesday said the economic recovery required more time before any tapering of stimulus and higher borrowing costs are appropriate, helping Wall Street recoup last week’s decline.

Canada is a major producer of commodities, including oil, so its economy is highly geared to the economic cycle.

Brent crude rose above $75 a barrel, reaching its highest since late 2018, after an industry report on U.S. crude inventories reinforced views of a tightening market as travel picks up in Europe and North America.

The Canadian dollar was trading 0.3% higher at 1.2271 to the greenback, or 81.49 U.S. cents, after touching its strongest level since last Thursday at 1.2265.

The currency also gained ground on Monday and Tuesday, clawing back some of its decline from last week.

Canadian retail sales fell by 5.7% in April from March as provincial governments put in place restrictions to tackle a third wave of the COVID-19 pandemic, Statistics Canada said. A flash estimate showed sales down 3.2% in May.

Still, the Bank of Canada expects consumer spending to lead a strong rebound in the domestic economy as vaccinations climb and containment measures ease.

Canadian government bond yields were mixed across a steeper curve, with the 10-year up nearly 1 basis point at 1.416%. Last Friday, it touched a 3-1/2-month low at 1.364%.

(Reporting by Fergal Smith; editing by Jonathan Oatis)

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Economy

Toronto Stock Exchange higher at open as energy stocks gain

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Toronto Stock Exchange edged higher at open on Wednesday as heavyweight energy stocks advanced, while data showing a plunge in domestic retail sales in April and May capped the gains.

* At 9:30 a.m. ET (13:30 GMT), the Toronto Stock Exchange’s S&P/TSX composite index was up 16.77 points, or 0.08%, at 20,217.42.

(Reporting by Amal S in Bengaluru; Editing by Sriraj Kalluvila)

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