Markets

In wake of Obamacare repeal failure, Trump cheers on stock market gains

President Trump tweeted that the U.S. stock market is up nearly 20% since he was elected.

The Dow Jones industrial average is up about 19% since Trump was elected on Nov. 8, 2016. The Standard & Poor’s 500 index has climbed 15.5% and the Nasdaq composite has surged nearly 23%.

The Commerce Department announced Friday that the U.S. economy expanded this spring at a solid 2.6% annual rate.

Total economic output, also known as gross domestic product, for the April-through-June period was in line with analyst expectations for a bounce-back based in part on pent-up demand. The economic growth rate was more than double the 1.2% pace in the first quarter. That figure was revised down Friday from an earlier estimate of 1.4%.

The stronger second quarter means that the economy expanded 1.9% in the first half of the year. That is roughly in line with estimates by the Federal Reserve and International Monetary Fund of 2.1% this year, which would be similar to the sluggish annual growth that has plagued the recovery from the Great Recession.

But the new data underscored the challenge facing Trump to fulfill his pledge of at least 3% annual growth, and is likely to increase calls from Republicans and businesses for big tax cuts to spur the economy.

White House and congressional Republican leaders took a key step toward tax reform Thursday by agreeing to ditch a controversial proposal for a border tax and agreeing on a broad set of principles.

But the outlook for large tax cuts remains unclear, particularly with the loss of offsetting revenue that would have come from the border-adjustment tax.

Trump’s tweet came as he regrouped from the failure of the latest GOP bid to repeal the Affordable Care Act, or Obamacare, which collapsed early Friday in the Senate.

In a tweet sent minutes earlier, the president threatened to end federal subsidies for healthcare insurance — for Congress as well as the rest of the country — if lawmakers do not approve a new healthcare bill.

— This post contains reporting from Jim Puzzanghera and Alex Wigglesworth

 

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