(Bloomberg) -- President Donald Trump’s re-election hopes have always hinged on supercharging the U.S. economy, and data showing faster than expected growth provided him a boost just as he prepares to ramp up his campaign.
Trump heralded the Commerce Department report Friday that gross domestic product rose at a 3.2 percent annual rate in the first quarter of 2019 -- describing it as “incredible,” while also claiming credit for driving low inflation.
"We’re knocking it out of the park," Trump said just before boarding Air Force One on Friday to travel to an event in Indianapolis for the National Rifle Association, a key constituency for the president.
April 26, 2019
Yet the president’s celebration also underscored the risks he faces if Friday’s preliminary figures -- which will be revised at least twice in the upcoming months -- turn out to be a mirage. The growth substantially beat analyst predictions, and it was fueled by both a buildup in inventories and a substantial decline in imports -- two trends likely to reverse in coming months. Other indicators, including final private sales, hint that growth could slow.
This weekend, the president will put his argument that he has lifted the economy before voters in Wisconsin, a Rust Belt state whose support for Trump proved decisive in his 2016 win over Democrat Hillary Clinton.
“GDP smashed expectations,” Trump said at the NRA rally.
Continuing to beat expectations is crucial for Trump, who has used his economic performance as a shield against complaints about his abrasive behavior and tumultuous management style. He signaled in a tweet this week he’s confident that the economy will buffer him from Democratic challengers in 2020.
“I believe it will be Crazy Bernie Sanders vs. Sleepy Joe Biden as the two finalists to run against maybe the best Economy in the history of our Country (and MANY other great things)!" Trump said.
Trump also sought credit for low inflation, in comments interpreted as his latest attempts to steer the Federal Reserve toward cutting interest rates. He has repeatedly derided Fed Chairman Jerome Powell over the central bank’s rate increases last year, and he even considered firing Powell, Bloomberg News has reported. Trump says if the Fed hadn’t raised rates, the U.S. gross domestic product would be higher.
“If we kept the same interest rates and the same quantitative easing that the previous administration had, that 3.2 would have been much higher than that,” Trump said at the NRA rally. “They hadn’t hit these numbers in 16 years.”
The central bank is holding a policy-setting meeting next week.
Trump has also suggested the economy’s performance should protect him from Congressional Democrats considering impeachment over his efforts to meddle in Special Counsel Robert Mueller’s Russia investigation:
“You mean the Stock Market hit an all-time record high today and they’re actually talking impeachment!?” Trump said in a tweet earlier this week.
Trump’s handling of a range of issues -- including civil rights, education, the environment and foreign policy -- was underwater among voters surveyed in an Economist/YouGov poll released this week. But the president does have the approval of a majority of Americans -- 51 percent -- on a single issue: the economy.
Focusing on economic growth as a lone bright spot for the president helps explain why he remains preoccupied with continuing to juice markets.
Trump’s remarks on Fed decisions disregarded long-standing White House practice of avoiding public comment on monetary policy out of respect for the central bank’s independence -- an article of faith among investors who purchase U.S. Treasuries.
And in recent weeks, Trump said he wanted to appoint two close political allies to the central bank’s board: former Republican presidential candidate Herman Cain and conservative economic commentator Stephen Moore. Cain withdrew earlier this month from consideration amid concern over past allegations of sexual harassment, and Moore’s nomination has come under fire for previous remarks criticizing women and cities in the Midwest.
Trump also sought credit on Friday for the nation’s gas prices, saying he had personally intervened to lower fuel costs.
“The gasoline prices are coming down. I called up OPEC. I said, ‘You’ve got to bring them down. You’ve got to bring them down,’ and gasoline’s coming down,” Trump said.
Trump did not clarify if he was referring to a new conversation with the Organization of the Petroleum Exporting Countries Secretariat in Vienna, or to previous efforts to lobby U.S. partners like Saudi Arabia to help reduce oil prices. Wholesale gasoline prices are actually up nearly 7 percent from a month ago, surging after the Trump Administration announced it would cease issuing waivers that allowed some countries to buy crude from Iran despite U.S. sanctions. U.S. crude prices have increased by roughly a third so far this year.
Trump has also looked to lobby U.S. business leaders ahead of his re-election campaign, asking them to bring manufacturing jobs back, particularly to Rust Belt states that are politically valuable and that have been hardest hit by globalization.
And the president remains hopeful that striking a trade deal with China can further boost markets ahead of 2020. Trump said Thursday that he expected Chinese President Xi Jinping to visit the U.S. soon, presumably to cement a final agreement. He told reporters Friday that talks on the long-awaited deal were proceeding favorably.
"We are in a trade deal, which, by the way, is going very well," Trump said.