Donald Trump's 'Best in Our Country's History' Economy May Sour, Presenting Re-election Risks

Donald Trump has placed a big bet for his presidency on the U.S. economy, publicly and repeatedly taking credit for gains since taking office in 2017. But now, more Americans are worried about the economy, and the sentiment among key business leaders suggests the U.S. could enter a recession by 2020, the year Trump may be running for a second term in office.

If America does hit a recession in 2020 and Trump seeks re-election as expected, he would become the first incumbent since Jimmy Carter in 1980 to run for re-election during a recession. Carter lost the race to Republican Ronald Reagan, the economy a significant factor. Former President George H.W. Bush lost a re-election bid to Bill Clinton in 1992 when America was emerging from a recession. During that term, Clinton effectively utilized the still-used phrase "it's the economy, stupid" to turn voters against Bush.

Trump's re-election bid is still a year away, but some economists and Americans fear that the once-robust economy is already slowing and that trouble may lie ahead.

According to a new NBC News/Wall Street Journal poll, 33 percent of Americans believe the U.S. economy will get worse in the next 12 months, while 37 percent think it will stay the same. That's a drastic change from January of this year, when only 20 percent believed the economy would get worse in the next 12 months.

The negative sentiment matched a recent survey of corporate chief financial officers conducted by Duke University in which half of the participants said they expected a recession by the end of 2019. More than 80 percent of the CFOs believed a recession would strike the U.S. by 2020, citing skills gap, "government policies, benefit costs, economic uncertainty and rising employment costs," according to CNBC.

"The end is near for the near-decade-long burst of global economic growth," John Graham, a finance professor at Duke's Fuqua School of Business and director of the survey, said in a statement. "The U.S. outlook has declined, and moreover the outlook is even worse in many other parts of the world, which will lead to softer demand for U.S. goods."

In Trump's first year as president, he frequently touted the bullish stock market and took credit for record increases in equities. In year two of his presidency, he aggressively linked himself to a stronger economy.

The Economy is soooo good, perhaps the best in our country’s history (remember, it’s the economy stupid!), that the Democrats are flailing & lying like CRAZY! Phony books, articles and T.V. “hits” like no other pol has had to endure-and they are losing big. Very dishonest people!

— Donald J. Trump (@realDonaldTrump) September 10, 2018

"The Economy is soooo good, perhaps the best in our country's history (remember, it's the economy stupid!), that the Democrats are flailing & lying like CRAZY!" President Trump tweeted in September 2018.

America's economy has indeed been on a roll through much of 2018, with unemployment below 4 percent and economic growth around 3 percent for the year. In fact, it's the best GDP growth for the U.S. since the recession in 2009.

Global economic uncertainty, fueled in part by Trump's tariff's war with China, and slowing economies in Europe have already spooked the U.S. stock market. No longer in a bull market like the one Trump liked to tout in 2017, some market experts say that Wall Street is nearing a bear market, with today's sell-off pushing the S&P 500 down 11 points from its record high set in September.

DoubleLine Capital CEO Jeffrey Gundlach said on CNBC Monday that he was "pretty sure this is a bear market."

"I think [the trade war] gets worse," said Gundlach. "We're probably going to ratchet up the tariffs."

With fears of additional short-term interest rate hikes from the Federal Reserve coming, combined with fears of peak corporate earnings and slower global economic growth, the U.S. stock markets have been rocked in December, a period typically known for its "Santa Claus rallies." At the moment, however, there's no Santa Claus rally impact, as major markets indexes are on track for the first annual decline since 2015.

The declining stock markets follow Trump's disappointing midterm election results, when Democrats made substantial gains for the House, delivering the President the "worst midterm performance for a Republican president since 1974, in the aftermath of Watergate," according to The Washington Post.

But Trump does hold the key to one major factor that could help the U.S. economy and markets in 2019: negotiations with China. Last Friday, President Trump tweeted that "China wants to make a big and very comprehensive deal. It could happen, and rather soon!" Successful negotiations could boost his re-election chances.

"If Trump could pull off a trade deal with China where they would make real concessions, I think you'd see the market go through the roof and the economy would soar. All those people saying the economy couldn't last until 2020 would have egg on their face," Stephen Moore, an economic adviser to the Trump campaign, said in November, according to The Washington Post.