Donald Trump’s presidency is facing numerous challenges, but there’s a big one looming that experts say will give him something in common with former president Jimmy Carter. CNBC reports that based on current market trends, it looks like Trump will be running for re-election during a recession. If it happens, he will be the first president to do so since Carter ran for his second term in 1980. Carter, a Democrat, lost that election to Ronald Reagan.
As CNBC notes, recent developments in the markets have triggered bleak predictions about the future of the American economy. Growth has contracted during the final quarter of 2018 and its expected to continue to do so in the new year. The bubble created by tax reform and increased spending is slowly starting to burst and some people expect that it will pop in 2020.
The United States is also still contending with the ongoing disruption caused by the U.S.-China tariff war. A strong dollar coupled with high corporate debt, diminished international growth and a sluggish housing market isn’t helping matters either, said Diane Swonk, chief economist for Grant Thornton LLP, an auditing and tax advisory company.
“No one knows for sure which straw will break the camel’s back, only that they are piling up,” she added, as reported by CNBC.
— Bloomberg Opinion (@bopinion) December 4, 2018
How these economic predictions will affect Trump’s re-election bid is left to be seen. Currently, a lot of the focus has been on the legal challenges posed by the Mueller investigation and other probes. But the economy was a big part of his “Make America Great Again” campaign for the last election, so we’ll have to see how his base reacts if this negative economic outlook becomes a reality.
As CNBC notes, the reality could be here sooner than previous expectations.
Diane Swonk has adjusted her recession prediction from late 2020 to early 2020. Her estimates are similar to those made by the majority of the members of the National Association for Business Economics who expect the recession to hit by the end of Trump’s re-election year.
Given Jimmy Carter’s precedent, the economic outlook could be worrying for Trump’s camp especially when you take his current approval rating into account.
According to Politico, Rasmussen Reports estimates that his approval rating stands at 50 percent, while Real Clear Politics has it at 43.3 percent.
Trump blamed the Mueller investigation for the rating.
“Without the phony Russia Witch Hunt, and with all that we have accomplished in the last almost two years (Tax & Regulation Cuts, Judge’s, Military, Vets, etc.) my approval rating would be at 75% rather than the 50% just reported by Rasmussen,” Trump tweeted.
Let’s see how he reactions to the predictions about the impending recession.
— The Hill (@thehill) December 6, 2018