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President Donald Trump failed to achieve his much-ballyhooed 3% target for economic growth in 2018 after all.

Updated government figures show that gross domestic product expanded 2.5% on a fourth-quarter-over-fourth-quarter basis last year. That compares with a previous estimate of 3% and an upwardly revised 2.8% in 2017, the first year of Trump’s presidency.

Behind the 2018 markdown: Slower growth of business investment and exports, along with a greater output in the fourth quarter of 2017 that made the comparison less favorable.

Data for the second quarter of 2019, also released Friday, showed the economy expanded at a 2.1% annualized pace -- above the median projection -- following a 3.1% reading in the prior three months. GDP grew 2.3% in the second quarter from a year earlier, the slowest in two years.

The new data call into question Trump’s claim that he’s lifting growth to 3%-plus from 2% through a mixture of tax cuts, deregulation and a pro-America trade policy. GDP gains in the first two years of his presidency, though, did top the expansion’s 2.3% average.

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A quarterly drop in GDP from 3.1 percent to 2.1 percent illustrates the growing toll that President Donald Trump’s trade policies are taking on American businesses, economists say.

American consumers proved themselves willing and able to spend in the second quarter, with a 4.3 percent increase in consumption offsetting a 5.5 percent slump in business investment.

“In the second quarter of 2019, we caught the first whiff of damage to the economy caused by Mr. Trump’s trade war,” said RSM chief economist Joseph Brusuelas, characterizing the issue as “an uncertainty tax” that has left corporate America guessing about the potential impact of tariffs on input costs and exports, supply chain disruption and market access.

According to July’s Business Conditions Survey conducted by the National Association for Business Economics, fewer than half of the respondents expect real GDP growth to increase by more than 2 percent over the next year, compared to two-thirds who expressed that view in January.

“On balance, panelists expect slower growth than they were expecting three months ago. After more than a year since the U.S. first imposed new tariffs on its trading partners in 2018, higher tariffs are disrupting business conditions,” Constance Hunter, NABE president and KPMG chief economist, said in the survey report.

In the second quarter, NABE survey respondents reported lower profit margins and, among goods-producing companies, higher input costs. More than three-quarters of respondents in that sectors said tariffs are having a negative impact on business.

In recent earnings calls, Brusuelas said, it was evident that executives are “growing increasingly concerned about the direction of trade,” which hurts investment in everything from factories to intellectual property.

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U.S. President Donald Trump said on Thursday he would impose an additional 10% tariff on $300 billion worth of Chinese imports starting Sept. 1, as talks aimed at easing tensions between the world’s two largest economies continue.

“Trade talks are continuing, and during the talks the U.S. will start, on September 1st, putting a small additional Tariff of 10% on the remaining 300 Billion Dollars of goods and products coming from China into our Country. This does not include the 250 Billion Dollars already Tariffed at 25%,” Trump tweeted.

In a string of tweets, Trump also faulted China for not following through on promises to buy more American agricultural products and personally criticized Chinese President Xi Jinping for failing to do more to stem sales of the synthetic opioid fentanyl.

U.S. stock prices fell after Trump's announcement, with the Dow Jones Industrial Average .DJI falling into negative territory.

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Stocks cratered, the dollar hit a more than two-year high and bond yields ripped higher after Fed Chairman Jerome Powell suggested that policymakers were not embarking on a new cycle of rate cutting, after it trimmed the fed funds rate by a quarter point Wednesday.

Markets have been on tenterhooks, once expecting three rate hikes this year, and then an easy Fed policy stance, even as the economy has been showing signs of improvement. But the Fed has been facing the unusual task of explaining why it was cutting rates in the face of stronger economic data.

Traders said there was disappointment with the Fed’s statement, which was perceived more as neutral than dovish, but when Powell later said during a press briefing that the Fed’s action was a “midcycle adjustment to policy” that sent markets reeling.

“I think by that it means he doesn’t necessarily mean more cuts are coming, maybe not necessarily one off but not indicative of more aggressive cuts,” said Ben Jeffery, a fixed income strategist at BMO.

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Economists can’t really predict recessions.

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But when a recession comes, I bet that it’s going to be worse than the average U.S. recession. The reason is that in 2017, 2018, macroeconomic policy was pro-cyclical. By macroeconomic policy, I mean fiscal policy, monetary policy, and also financial regulation. And by pro-cyclical, I mean loosening up at the peak of the business cycle, when unemployment is below 4 percent (it’s the lowest it’s been in 50 years), and output is above potential (the economy was growing relatively strongly last year). But that’s not the time to be running trillion-dollar budget deficits or have interest rates close to zero or to be dismantling financial regulation and protections we put in place after the last financial crisis. And in 2017-2018, we did all three of those things.

...The reason why I draw the connection between pro-cyclical policy and a prediction that, when the next recession comes it’ll be worse than the average, is the government is now out of ammunition. In the past, the Federal Reserve has had room to cut interest rates, fiscal policy has had room to cut taxes and raise spending to stimulate the economy, and financial regulation has had room to have a little forbearance. But if we’re already having all those instruments at full throttle, it leaves very little space to respond to a recession if and when it comes.

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(So, what IS his job?)

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Originally posted by Piano*Dad:
...We will be sort of like ... Greece. That's why he thinks the recession will be nasty, brutish, and possibly longer than anyone would like to endure.

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Greece Crisis Explained. In 2009, Greece's budget deficit exceeded 15 percent of its gross domestic product. Fear of default widened the 10-year bond spread and ultimately led to the collapse of Greece's bond market. This would shut down Greece's ability to finance further debt repayments.

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The world’s headlong dash to zero or negative interest rates just passed another milestone: A bank in Denmark is paying homebuyers to take out mortgages.

Jyske Bank A/S, Denmark’s third-largest lender, announced in early August a mortgage rate of -0.5%, before fees. Nordea Bank Abp, meanwhile, is offering 30-year mortgages at annual interest of just 0.5%.

Years of easing by central banks hacked away at interest rates around the world, distorting the traditional economics of lending and borrowing. This is most pronounced in Europe, where a composite home-loan rate across the euro area fell to 1.65% in June, the lowest since records began in 2000.

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United States Steel will temporarily lay off workers at its Great Lakes facility in Michigan in coming weeks, according to a filing the steelmaker made with the State of Michigan.

In a Worker Adjustment and Retraining Notification filed on August 5, the Pittsburgh-based company said it expects to let go fewer than 200 workers following its decision to halt production at the Michigan facility.

In mid-June, the company said it would idle two blast furnaces at its Great lakes and Gary ...

The lay-offs call into question claims President Donald Trump has made about the resurgence of the domestic steel industry. Last week in Pennsylvania, Trump said his 25% tariff on foreign imports has turned a “dead” business into a “thriving” enterprise.

Domestic steel prices did rise in the immediate aftermath of Trump’s tariffs. But they have fallen dramatically amid improved supplies and weakening demand from the auto and farm machinery sectors.

Prices of hot-rolled coil are down nearly 37% from their 2018 peak.

U.S. Steel’s stock price has plunged 73% since March 1, 2018, when Trump announced his decision to crack down on foreign imports.