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On The Money: Slowing economy complicates 2020 message for Trump | Tech confronts growing impact of coronavirus | Manufacturing rises after five-month contraction

On The Money: Slowing economy complicates 2020 message for Trump | Tech confronts growing impact of coronavirus | Manufacturing rises after five-month contraction
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Happy Monday and welcome back to On The Money, where we hope you have recovered from your Super Bowl celebration. I'm Sylvan Lane, and here's your nightly guide to everything affecting your bills, bank account and bottom line.

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THE BIG DEAL--Slowing economy complicates campaign messaging for Trump: President TrumpDonald John TrumpVenezuela judge orders prison time for 6 American oil executives Trump says he'll leave White House if Biden declared winner of Electoral College The Memo: Biden faces tough road on pledge to heal nation MORE is heading into the 2020 campaign with a resilient economy behind him and new trade deals under his belt, counting on both to help bolster his reelection odds.

But as Trump claims credit for extending the longest-ever stretch of U.S. economic prosperity, recent government figures show he is falling far short of his promise to accelerate the economy.

  • Trump took office on a pledge to expand gross domestic product (GDP) at least 3 percent a year.
  • While he came close to that mark in 2018 through tax cuts and higher government spending, growth slowed to 2.3 percent last year, the weakest annual pace since he took office, according to Commerce Department data released Thursday.
  • Trump and GOP lawmakers counter that, even with slower growth, the U.S. is outpacing Asian and European allies who are teetering on the brink of recession. Even so, economists who have longed doubted Trump's ambitious GDP targets argue he has done little to improve the economy inherited from former President Obama.

The Hill's Naomi Jagoda and I explain how that could hinder the president's reelection campaign here.

 

The background: While unemployment dropped steadily during the last two-thirds of Obama's presidency, economists warned that the U.S. would likely settle into a prolonged stretch of moderate growth near 2 percent GDP.

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Trump and his top economic aides defied that consensus, arguing that a combination of tax cuts and deregulation could deliver faster annual growth. The president campaigned in 2016 on a promise of boosting economic growth to an average of 3 percent to 5 percent each year, an ambitious pace for any developed economy.

  • The 2017 Republican tax-cut bill and a massive budget deal for higher spending helped boost growth from 2.4 percent in 2017 to 2.9 percent the following year. 
  • But as the effect of the tax cuts and spending faded while Trump's trade wars escalated, the economy slowed to 2.3 percent in 2019. 

 

Reactions:

 

LEADING THE DAY

Tech confronts growing impact of coronavirus: Major American tech companies are facing a new challenge as they take steps to grapple with the outbreak of the coronavirus in China.

Over the past two weeks, tech companies have closed stores and offices, restricted executives and workers from traveling to the country and warned about the potential effects on their supply chains.

  • The rapid spread of the disease has already had economic repercussions in China, where stocks dropped 8 percent Monday after markets reopened for the first trading session since Jan. 23.
  • Experts have warned that the outbreak in the world's most populous country and an economic superpower could threaten global growth this year.
  • But the effects could be particularly felt by the U.S. tech industry, which has depended on China both as a major market for its goods and as a critical supplier of components for a number of consumer products.

The Hill's Chris Mills Rodrigo tells us how the outbreak is a challenge for tech firms

 

Read more: Stocks rallied Monday morning after strong factory data to pare back coronavirus losses. The Dow Jones Industrial Average closed for the day up 144 points.

 

Manufacturing rises after five-month contraction: A five-month contraction in the manufacturing industry ended in January, according to the Institute for Supply Management.

The monthly Manufacturing ISM Report on Business found manufacturing in positive territory for the first time since July, with the index at 50.9 percent, 3.1 points above December. Readings below 50 indicate the sector is shrinking.

The survey found an uptick in new orders and a move to fill up depleted inventories. A measure of backlogged orders, however, continued contracting for the ninth month in a row.

The Hill's Niv Elis breaks down the data here.

 

GOOD TO KNOW

  • The IRS on Monday touted a streamlined resource on its website on identity theft protection, as people are starting to file their 2019 tax returns.
  • The Wall Street Journal: "Six key controversies in the U.S.-Mexico-Canada Agreement"
  • Bloomberg News: "By several measures, the biggest U.S. banks are just as risky today as they were before the last financial crisis."

 

ODDS AND ENDS

  • Google's parent company Alphabet on Monday revealed for the first time how much ad revenue the video giant YouTube has generated: $15.1 billion in 2019 alone, marking a nearly 100 percent increase since 2017.  
  • A group of 15 Democratic senators wrote to 11 major banks last week asking them to halt the funding of oil and gas drilling or exploration in the Arctic National Wildlife Refuge. 
  • The Department of Health and Human Services told Congress it could transfer up to $136 million in funding to respond to the coronavirus outbreak.
  • The Chamber of Commerce is hoping for a focus on infrastructure and trade in Trump's State of the Union address on Tuesday.