President Trump will lead the GOP into the elections amid the best first-term economy in three decades.
Real gross domestic product grew at an annualized rate of 3.5 percent in the last quarter, which ran from July through September, the government reported Friday.
The last time a president had such a hot economy heading into the congressional elections in his first term was President Carter in 1978, who was sitting on a 4.1 percent growth rate.
The country was in a recession in 1982, President Reagan’s first midterm, and was barely growing at less than 1 percent for President George H.W. Bush. President Clinton managed a 2.4 percent rate, President George W. Bush oversaw a weaker 1.8 percent and President Obama had a solid 3 percent.
Mr. Trump took office with growth at 1.8 percent his first quarter, then saw it quickly heat up. He’s since posted quarterly growth of 3 percent, 2.8 percent, 2.3 percent, 2.2 percent, 4.2 percent and now 3.5 percent.
“These results are no accident — this is what happens when we pass policies to help American consumers, workers, and businesses generate economic growth and opportunity,” said House Speaker Paul D. Ryan, Wisconsin Republican.
He and fellow Republicans point to the stunningly low unemployment rate and high consumer confidence as other indicators of a strong economy.
But the stock markets have had a turbulent month, and the government reported the federal deficit is quickly soaring yet again. Indeed, the same tax cuts and spending hikes that are likely helping the economy are leaving the government facing trillion-dollar deficits by the end of this decade.
Some conservatives warned the economy should be doing better.
The Club for Growth, a free market political lobby group, said while growth was strong, the economy “has recently encountered some formidable headwinds.” Club President David McIntosh said the administration should issue an executive order tying capital gains taxes to inflation, which would cut investors’ tax bills.
Josh Bivens, research director at the Economic Policy Institute, a liberal-leaning think tank, said the lesson of growth was that government spending can boost the economy. He said the $300 billion, two-year spending increase Congress agreed to earlier this year is the biggest infusion since the Obama stimulus — and it’s reverberating.
Still, in a piece Friday morning, he blamed the GOP for a bad mix of policies, saying their tax cuts weren’t helpful, but said some good came out of the spending.
“What this past year’s growth acceleration has made clear is that Congress and the president really can use fiscal policy to provide a very quick and sharp boost to the economy — even when they’re being mostly incompetent about it,” he said. “We should insist in the future that this power be used when it’s good for typical families, not just when it’s useful for beating your political opponents.”
Good GDP growth hasn’t been a magic elixir for presidents in midterm elections.
The economy grew at 4.9 percent just ahead of the 2014 elections, yet Mr. Obama’s party took a pummeling, losing the Senate and suffering even deeper losses in the already GOP-led House. That was his second midterm.
Meanwhile, Mr. Clinton’s fairly strong 2.4 percent growth rate in 1994 didn’t prevent the GOP wave that year.
Steve Moore, senior economic contributor at the conservative group FreedomWorks and former economic adviser to the Trump presidential campaign, said the third-quarter report shows that consumers “went on a spending spree.”
“Unlike the previous report that was driven by business spending, this report was really driven by consumer spending,” Mr. Moore said in an interview. “That might be the best indication of how well workers are doing. They feel good about things. I think it’s the best indication yet of how widespread this recovery is.”
He said economic growth is averaging double what it was under the Obama administration.
“That’s a huge increase — more than doubling the growth rate in less than two years,” he said. “The liberal economists who gave us ‘Obamanomics’ were completely wrong about potential growth in the economy.”
• Stephen Dinan can be reached at sdinan@washingtontimes.com.
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