Trump Oversells Recent U.S. Economic Growth

In the 2nd and 3rd quarters of 2025, the U.S. system grew astatine its fastest gait successful 2 years. Those maturation rates were not “numbers unheard of,” oregon figures the U.S. “never had” before, arsenic President Donald Trump has claimed.

In addition, economical experts told america that national information bash not enactment Trump’s assertion that determination was economical “stagflation” during the Biden medication and “the implicit opposite” during Trump’s archetypal twelvemonth backmost successful office. Inflation was precocious during overmuch of Joe Biden’s presidency, but economical maturation was not stagnant, different cardinal indicator of stagflation, the experts said. 

They besides said that Trump’s tariff policies apt hindered economical growth, alternatively than helped spur it, arsenic the president has suggested. 

Trump made those claims portion touting the U.S. system successful caller speeches and remarks, arsenic good arsenic successful a precocious January sentiment portion written for the Wall Street Journal.

Economic Growth

During a Jan. 27 speech successful Iowa, Trump said, “So, nether my leadership, economical maturation is exploding to numbers unheard of. They’ve ne'er had them before.”

He aboriginal said successful an interview with NBC News connected Feb. 4, “We person debased ostentation and we person tremendous growth. You haven’t had these numbers similar this.”

And erstwhile claiming to person achieved “unprecedented” maturation numbers successful a Jan. 29 Cabinet meeting astatine the White House, Trump said that if not for the 43-day national authorities shutdown past fall, “we would person picked up astir a constituent and a fractional much than [the] already precocious numbers, grounds mounting numbers.”

While the U.S. system grew importantly successful the 2nd and 3rd quarters of 2025, according to the astir caller information from the Bureau of Economic Analysis, the numbers did not acceptable records, arsenic Trump claimed.

After declining by an annualized complaint of 0.6% successful the archetypal 4th of 2025, which covers the 3 months from January to March, existent gross home merchandise (meaning it has been adjusted for inflation) grew astatine an annualized complaint of 3.8% successful the 2nd 4th of 2025 and astatine a complaint of 4.4% successful the 3rd quarter. Those were the largest quarterly increases since the 3rd 4th of 2023, nether Biden, erstwhile the system expanded astatine an annualized complaint of 4.7%, according to BEA estimates.

The grounds for quarterly maturation is 34.9% successful the 3rd 4th of 2020, which happened close aft the system shrunk by 28% astatine the commencement of the COVID-19 pandemic. The pre-pandemic quarterly maturation grounds is 16.7% successful the archetypal 4th of 1950, according to BEA quarterly information going backmost to 1947.

Legacy codes

On several occasions, Trump has said that 4th fourth maturation is projected to beryllium 5.4%, a fig that helium has attributed to the Federal Reserve Bank successful Atlanta. But that projection is present retired of date.

Throughout overmuch of January, the Federal Reserve Bank of Atlanta’s GDPNow exemplary was projecting maturation of 5.4% for the 4th fourth of 2025. Then, connected Jan. 29, the projection lowered to 4.2%, and, arsenic of Feb. 10, it was down again, to 3.7% projected growth.

The BEA is scheduled to merchandise its precocious estimation of GDP for the 4th quarter, and each of 2025, connected Feb. 20.

Stagflation

Trump besides has claimed that helium turned astir an system that had stalled nether Biden.

“Under the Biden administration, America was plagued by the nightmare of stagflation, meaning debased maturation and precocious inflation, a look for misery, nonaccomplishment and decline. But now, aft conscionable 1 twelvemonth of my policies, we are witnessing the nonstop other – virtually nary ostentation and extraordinarily precocious economical growth,” Trump said astatine a World Economic Forum gathering connected Jan. 21.

He repeated the “stagflation” assertion successful his Jan. 30 opinion piece published successful the Wall Street Journal.

But economists told america that the U.S. system nether Biden did not acquisition stagflation, which has a circumstantial economical meaning.

“It refers to a sustained play of precocious ostentation combined with anemic oregon stagnant existent economical growth, typically alongside rising unemployment,” Kyle Handley, a prof of economics astatine the University of California, San Diego, told america successful an email. “By that definition, the U.S. system during the Biden years does not suffice arsenic stagflation.”

Handley said that the annual ostentation rate did “rise sharply” during Biden’s archetypal 2 years successful office. It peaked successful June 2022, astatine 9.1%, earlier declining dramatically successful Biden’s past 2 years successful office. 

“However, existent GDP maturation during the Biden presidency was affirmative and often supra trend, and unemployment remained historically low,” Handley said. “Real GDP grew powerfully successful 2021 during the post-pandemic recovery, slowed successful 2022 arsenic monetary argumentation tightened, and past re-accelerated successful 2023 and 2024. That is not a play of economical stagnation.”

In an infographic from November, the unit of the Federal Reserve Bank of Cleveland wrote that the “last large case” of stagflation successful the U.S. “occurred successful the mid-1970s, erstwhile planetary crude lipid prices surged, triggering wide rises successful different prices and fueling ostentation of much than 12 percent and unemployment that peaked astatine 9 percent.” The infographic said that stagflation — the operation of rising unemployment and inflation, and slowing economical maturation each astatine the aforesaid clip — was “rare” and “an antithetic pattern.”

When we asked astir the ground for the president’s stagflation claim, a White House spokespeson told america that “[r]eal wages shrank markedly during the Biden presidency, and maturation – erstwhile you enactment speech the aboriginal spot of Biden admin erstwhile Democrat authorities officials yet started lifting unscientific and draconian lockdowns – was tepid with ostentation astatine 40-year highs.”

There was a alteration successful existent wages nether Biden, as we’ve written. But the system grew by good implicit 2% each twelvemonth during his administration, and the complaint of inflation, portion inactive elevated, was not adjacent a 40-year precocious erstwhile helium near office. The 9.1% yearly complaint successful June 2022 was the highest since November 1981. The complaint was 3% successful Biden’s last 12 months.

The unemployment complaint besides decreased nether Biden, going from 6.4% erstwhile helium was inaugurated to 4% successful his past month, according to the Bureau of Labor Statistics. The mean monthly complaint for Biden’s presidency was 4.1%, beneath the humanities average.

“You had precocious inflation, yes, but paired with beardown maturation and a robust labour market,” Aeimit Lakdawala, an subordinate prof of economics astatine Wake Forest University, told america successful an email. “That’s conscionable not stagflation by immoderate modular explanation of the term.” 

He said that Trump’s assertion of engineering a implicit turnaround from the Biden system is an overstatement.

“What we’re truly seeing is simply a continuation of trends that were already good underway earlier Trump took bureau successful January 2025,” Lakdawala said.

He noted that the yearly ostentation complaint had cooled to 3% erstwhile Trump’s 2nd word started. It had been arsenic debased arsenic 2.4% successful September 2024.

“That disinflation happened nether Biden, driven mostly by the solution of proviso concatenation issues and Fed monetary policy,” helium said, referring to the Federal Reserve. “Under Trump’s 2nd word truthful far, ostentation has averaged astir 2.7%. That’s modestly lower, but it’s not a melodramatic reversal.”

Although Trump considers the 2.7% yearly ostentation rate, arsenic of December, to beryllium “very low” oregon “virtually nary inflation,” it is inactive supra the 2% target acceptable by the Federal Reserve. Prices are inactive increasing, conscionable astatine a somewhat slower gait than earlier helium became president again.

As for economical growth, Lakdawala said that the summation successful existent GDP has “averaged astir 2.5% annualized truthful acold nether Trump’s 2nd term, which is coagulated but really a interaction little than the 2.9% we saw” successful Biden’s past 2 years arsenic president.

“So characterizing this arsenic ‘extraordinarily precocious economical growth’ is simply a stretch,” helium said astir Trump’s claim. “It’s bully growth, astir successful enactment with wherever we’ve been.”

The unemployment rate, meanwhile, was 4.3% successful January, somewhat higher than erstwhile Trump took office.

Tariff Effect

In his Wall Street Journal opinion piece, Trump said that the “entire Trump economical docket deserves recognition for this detonation of growth” — but helium specifically gave recognition for the country’s “economic success” to his tariff policies.

“We person proven, decisively, that, decently applied, tariffs bash not wounded maturation — they beforehand maturation and greatness, conscionable arsenic I said each along,” the sentiment portion said.

But the experts we consulted told america that the system apt grew contempt the tariffs, not due to the fact that of them.

“Year-over-year existent GDP maturation implicit the past twelvemonth looks akin to the years instantly preceding the caller tariffs,” Handley said. “Outside of the pandemic period, maturation has been comparatively unchangeable crossed administrations, which makes it hard to property caller show to tariffs alternatively than economical momentum.”

He noted that the tariffs that Trump placed connected imported overseas goods past twelvemonth were not arsenic precocious arsenic the rates helium primitively proposed, and that tariff revenue, which did summation importantly successful 2025, is inactive rather tiny successful narration to GDP (about 1% of GDP arsenic of the 3rd 4th of 2025, according to the Federal Reserve Bank of St. Louis).

“By construction, a argumentation of that size cannot plausibly explicate an summation successful aggregate economical growth,” helium said.

Lakdawala had a akin take.

“Crediting tariffs for economical maturation gets the causation backwards,” helium said. “The economics connected this is reasonably wide and determination is wide statement among economists: tariffs are fundamentally a taxation connected imports that raises costs for home consumers and businesses. If anything, they’ve been a humble resistance connected growth, not a operator of it.”

He pointed to an investigation done by the Budget Lab astatine Yale, a nonpartisan probe center, that said that successful 2025 tariffs slowed existent GDP maturation by 0.5 percent points and accrued the unemployment complaint by 0.3 percent points. The Budget Lab estimated that tariffs volition trim existent GDP maturation by 0.4 percent points successful 2026, and said that “[i]n the agelong run, the US system is persistently 0.3% smaller, the equivalent of $100 cardinal annually successful 2025 dollars,” due to the fact that of tariffs.

“These aren’t catastrophic numbers and the system is resilient and has absorbed the tariff daze reasonably well,” Lakdawala said. “But they intelligibly constituent successful the incorrect absorption for idiosyncratic trying to recognition tariffs with economical success.”

The pro-business Tax Foundation besides said that Trump’s imposed tariffs, if the Supreme Court rules that immoderate of them tin stay successful effect, “will rise $2.0 trillion successful gross from 2026-2035 connected a accepted ground and trim US GDP by 0.5 percent, each earlier overseas retaliation” from different countries. 

The White House told america that, nether Trump, the “[a]nnualized complaint of ostentation has been trending successful the mid-twos and GDP maturation successful Q3 surpassed expectations by implicit a afloat point, hitting supra 4 percent. Largely driven by the investments we are seeing acknowledgment successful portion to tariffs.”

But Handley noted that galore of the investments touted by Trump are “announcements alternatively than realized outcomes.”

“Foreign concern commitments bash not straight participate GDP, and they often bespeak projects planned years successful advance,” helium said, adding that immoderate of the pledges made by overseas countries and companies “may ne'er travel to fruition.”

We’ve already written that Trump’s assertion that helium has brought successful astir $18 trillion successful investments to the U.S. is exaggerated, according to experts and a White House webpage.

Giacomo Santangelo, a elder lecturer of economics astatine Fordham University, told america successful an interrogation that depletion is the “largest portion” of GDP, and that radical are presently taking connected much indebtedness to concern that spending. “That’s what’s driving this economy,” helium said.

Joseph Brusuelas, main economist astatine RSM, wrote successful December that the third-quarter maturation was owed to “[h]ousehold depletion driven by higher-income consumers and AI-related investment,” which helium said “accounted for conscionable nether 70% of full maturation during the [third] quarter.”

In its news release astir third-quarter maturation successful 2025, the BEA said, “The summation successful existent GDP successful the 3rd 4th reflected increases successful user spending, exports, authorities spending, and investment.” For the 2nd quarter, the BEA said the summation “primarily reflected a alteration successful imports, which are a subtraction successful the calculation of GDP, and an summation successful user spending.”

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