Trump's golden age reality check

The Trump administration's rosy promises of a new "golden age" with 6% economic growth have fizzled on the realities of slower-than-anticipated growth and souring consumer sentiment.

Why it matters: President Trump's roller coaster economy has risen with consumer spending and AI investment but also tumbled on tariff uncertainty, stubborn inflation and his Iran war, muddling the economic picture.

• Trump preaches a golden future, but many voters aren't buying it.
• That's a warning sign for the midterms: Reuters-Ipsos polling out this week found that Americans favored Democrats over Republicans on economic policy for the first time in nearly a decade.

The big picture: Roughly 18 months into Trump's second term, the economy has proved more resilient than many expected, buoyed in large part by an AI infrastructure buildout that transcends Washington politics.

• But the dramatic acceleration the administration promised has yet to materialize.
• Many economists believe the administration's most ambitious growth targets would require a productivity boom well beyond anything currently visible in the data.

Reality check: The economy grew at a 1.5% annualized rate in the second quarter, slowing from the 2.1% pace in the first quarter.

• The economy has grown at roughly a 2% annualized pace since the start of 2025.
• That's a solid pace, but it's little different from the economy's long-run trend and well short of the growth rates some of Trump's top economic officials have hyped in recent months.

Flashback: If you asked Commerce Secretary Howard Lutnick in January, growth could have hit 5% in the first quarter — even 6%, if the Fed cut interest rates, he said — which didn't happen.

• Top White House economist Kevin Hassett pitched up to 6% growth back in the spring, attributing the boost to a future factory boom.
• After back-to-back quarters of roughly 4% growth in the middle of 2025 — boosted in part by swings in trade tied to tariffs — Treasury Secretary Scott Bessent called the performance a "harbinger of what's to come."
• Bessent's "3-3-3" economic blueprint targets sustained 3% annual growth.

Yes, but: The Congressional Budget Office estimates potential GDP growth will average about 2% over the next decade.

• The last time the economy expanded at rates consistent with Trump officials' high-end predictions was during the one-off reopening from the pandemic.
• "That's just unrealistic," says Michael Klein, an economics professor at Tuft University's Fletcher School and executive editor of EconoFact. "You don't see that in an economy like the United States."

What they're saying: Joseph Lavorgna, a former advisor to Bessent, says 3% growth is plausible, arguing the latest 1.5% GDP print didn't "fully … capture the robustness in the economy."

• Underlying demand — stripping out volatile swings in trade, inventories and government spending — grew at a 3.9% annualized pace in the second quarter, thanks to strong consumer and business spending.
• When Fox Business' Maria Bartiromo pressed Hassett Friday on his recent prediction of 4% growth in the second half of the year, Hassett argued he was discussing domestic demand rather than the topline number.
• White House spokesperson Kush Desai said in a statement that "[d]espite possible inventories data lags, the Q2 GDP report reinforces … that the American consumer remains resilient and the long-term restoration of America's industrial base continues."

What to watch: The Trump administration on Monday touted a "nowcast" produced by the Atlanta Fed, which currently estimates growth is running at a robust 6% annualized pace in the current quarter.

• But economists treat that figure with caution this early in the quarter: the model is still working with only a limited set of July economic data, and the estimate can change sharply as more reports are released.
• At roughly the same point in the second quarter it was estimating growth of about 3.5% — more than double the 1.5% pace the economy ultimately posted.

Between the lines: Lavorgna tells Axios he "can't get there on the arithmetic" to 4% or 5% growth, noting that with a stagnant workforce, there'd have to be a significant boost in productivity to get there without inflation.

• "The dynamics aren't going to allow us to grow at those growth rates, at least for the foreseeable future," he says.

Go deeper: U.S. economy grows at 1.5% rate in second quarter