Since FDR first popularized the concept at the start of his first term in 1933, the first 100 days of a president’s term is often seen as a benchmark date for early accomplishments that set the tone for the presidency. The first 100 days are especially meaningful when the president’s party also holds a majority in Congress, making it easier to pass legislation, and when the presidency has switched parties, taking the country in a new direction. When both of those are in place, as they are for President Trump, the president has both the means and motive to get off to a fast start. We now sit a little over halfway through the president’s first 100 days, which will come to a close on Sunday, April 30, 2017. Let’s review what has happened since the inauguration and what it might mean for the economy.
What We’ve Learned
The president continues to receive the most widespread support on his expected handling of the economy. Trump’s approval ratings tend to break sharply along party lines, and those divisions have widened over the last 40 years. Nevertheless, Trump’s support on the economy has tended to be broader than on other issues. In particular, Trump’s approach to tax reform and deregulation align well with traditional Republican policy and also draw some support from those social liberals who tend to be more conservative on economic policies.
Trump’s victory led to a rapid shift in expectations between Election Day and the inauguration, but expectations have largely held steady since. In October 2016, before the election, economists surveyed by the Wall Street Journal had consensus expectations of 2.2% real gross domestic product (GDP) growth in 2017 and 2.0% in 2018. By January 2017, those numbers had risen to 2.4% and 2.5%, but have not moved in more recent polls. The movement from 2.2% to 2.4% for 2017 may reflect a strengthening rebound from slow growth in 2016 and is likely only marginally attributable to the election. The real difference is in 2018 expectations, when Trump’s economic policies may allow stronger growth to carry through into 2018 rather than reverting back to the 2.0% growth rate typical of the current expansion. Overall, economists have seen little that has led them to change expectations in Trump’s first 50 days.
The president’s policy agenda will be delayed by repeal and replace but not derailed. In our Outlook 2017: Gauging Market Milestones, we indicated that the timing of the healthcare overhaul might delay the impact of Trump’s economic agenda largely into 2018. The legislative complexities of repealing and replacing the Affordable Care Act (ACA) have likely pushed the timing of other priorities back. We believe the president may have been satisfied with some initial high profile but benign changes, with the full policy change to be implemented only after other top legislative priorities, but new legislation was a higher priority for Congressional Republicans, who made it the centerpiece of their criticism of Obama for years. Due to its complexity, creating the replacement law, the American Health Care Act (AHCA) will occupy significant legislative energy and will likely at least modestly push back other policy goals.