With the unemployment rate still at 3.7% and GDP growth at 2.0%, the American economy remains solid, if not spectacular. But with more warning lights flashing yellow, Team Trump is growing more concerned about the direction of the so-called best economy ever just as the 2020 election heats up.
The president and his advisers have good reason to be concerned. Last week, the ISM Manufacturing Index dipped below 50 for the first time in three years, a level indicating contraction in manufacturing by America’s factories. The University of Michigan Consumer Sentiment Index plummeted, too, dropping by 8.6 points, its largest decline since the “Fiscal Cliff” crisis of December 2012. Exactly as predicted, the small bump from the GOP’s Tax Cuts and Jobs Act of 2017 has disappeared, even as that windfall for the wealthy is helping drive Uncle Sam’s annual budget deficit past the one-trillion-dollar mark. Worst of all, the self-inflicted wound that is Donald Trump’s trade war with China is slowing growth, taking a bite out of U.S. manufacturing, and savaging American farmers in precisely those states Trump must carry to stay in office for four more years.
But the surest sign of future trouble comes from a city in a state that Republicans are certain to win next year. Until recently, Elkhart, Indiana, home of America’s recreational vehicle industry, enjoyed robust job growth, strong salaries, and an unemployment rate well below the national average. But with mounting uncertainty about the U.S. economy, sales of motor homes, campers, trailers, and other RVs have begun to drop, taking with them jobs in the industry. And RVs have long been a big-ticket bellwether for the economy, a leading early indicator of its health—or lack thereof.