Donald Trump Is Losing Support for His Handling of America's Economy

Donald Trump US economy approval rating
President Donald Trump speaks as he arrives for the weekly Senate Republican Policy Lunch at the U.S. Capitol, on March 26. Trump is losing support among Americans for his steering of the economy. BRENDAN SMIALOWSKI/AFP/Getty Images

President Donald Trump's approval rating for his handling of the American economy dipped further in March, though it is still in positive territory.

According to the CNBC All-America Economic Survey, which polled 800 people between March 18 and 21, 47 percent approved of how Trump is managing the economy, down a point on the previous quarter. His 4 percent net approval rating on the economy has fallen 15 points since June.

The survey also showed that 50 percent of Americans believe the economy is in excellent or good shape, unchanged on the previous quarter but down from 58 percent before that. Concerns continue to build over future growth prospects amid a general slowdown since last summer.

Trump regularly boasted about the state of the economy, proclaiming it to be the best in the world. The president pointed to record employment data and healthy economic growth as evidence that his plan of trade wars, deregulation, and deficit-funded tax cuts worth $1.5 trillion is working.

But the Bureau of Economic Analysis data shows a sharp decline in the rate of economic growth over the past three quarters, a trend that is set to continue.

In the second quarter of 2018, GDP peaked at 4.2 percent, up from 2.2 percent in the first quarter of that year. This then fell to 3.4 percent in the third quarter and 2.6 percent in the fourth. Across the whole year, GDP grew by 2.9 percent, below Trump's 3 percent target.

The Federal Reserve forecasts economic growth to be just 2.1 percent in 2019. Moreover, they project a slight rise in the unemployment rate to 3.7 percent this year, according to estimates released at the March meeting of the rate-setting Federal Open Market Committee.

Monetary policymakers signaled that they do not plan to raise interest rates in the near future, describing themselves as patient in the face of a wider global economic slowdown.

In February, former Fed chair Janet Yellen suggested Trump did not understand how the economy works following his criticism of the central bank and its officials.

Trump attacked current chair Jerome Powell's steering of the Fed, which tightened monetary policy as the economy grew. He accused the Fed, which is independent, of failing to support his trade policy and claimed that policymakers "don't have a feel for the market."

The mission of the Federal Reserve, set by Congress, is "to promote maximum employment, stable prices, and moderate long-term interest rates in the U.S. economy."

"President Trump's comments about Chair Powell and about the Fed do concern me, because if that becomes concerted, I think it does have the impact, especially if conditions in the U.S. for any reason were to deteriorate, it could undermine confidence in the Fed," Yellen, now a fellow at Brookings Institution, told Marketplace. "And I think that that would be a bad thing."

When asked directly if she thought the president had a grasp of macroeconomics, Yellen replied: "No, I do not.

"I doubt that he would even be able to say that the Fed's goals are maximum employment and price stability, which are the goals that Congress has assigned to the Fed.

"He's made comments about the Fed having an exchange rate objective in order to support his trade plans, or possibly targeting the U.S. balance of trade.

"And, you know, I think comments like that show a lack of understanding of the impact of the Fed on the economy, and appropriate policy goals."