Book Description

Three years into the Trump Administration, the U.S. economy continues to outperform expectations across numerous metrics, with growth in output, employment, and employee compensation all exceeding pre-2017 forecasts. The evident success of the Administration's economic policy agenda demonstrates that its foundational policy pillars are enabling the U.S. economy to overcome structural trends that were previously suppressing growth. During the four quarters of 2019, real gross domestic product grew 0.7 percentage point faster than had been projected by the independent Congressional Budget Office's (CBO) August 2016 projections. As shown in figures I-1 and I-2, the U.S. labor market added 2.1 million new jobs-2.0 million more than projected in 2016-bringing the civilian unemployment rate down to 3.5 percent, which is its lowest level since 1969 (and 1.4 percentage points below 2016 CBO projections).1 Higher pay accompanied abundant job vacancies, as employee compensation rose to 1.4 percent above the 2016 forecast, implying an additional $1,800 in compensation per household. In July 2019, the current expansion of the U.S. economy became the longest on record. Contrary to expectations that the expansion would slow as it matured, economic output has accelerated over the past 3 years relative to the preceding 71/2 years, with output growth rising from 2.2 to 2.5 percent at a compound annual rate. In the first three quarters of 2019, U.S. economic growth was the highest among the Group of Seven countries.