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Standing in the Oval Office on Aug. 31, President Donald Trump said the U.S. economy could grow “14, 15, 16 and 20” percent — and added that “success in growth does not cause inflation.” (1)
I’ve been a CPA since 1981, and I’ve been writing about the economy for more than 35 years. That’s long enough to hear a lot of big round numbers from a lot of podiums. So I did what I always do with a number that big: I checked it against the record.
A 20% annual growth rate has shown up exactly once in U.S. data going back to 1947 — the third quarter of 2020, when the economy snapped back at a 34.9% annualized rate after the Covid shutdown gutted it the quarter before. (2)
Take out that one rebound and the postwar high is 16.7%, set back in 1950. (2) CNBC called growth anywhere near the president’s numbers “virtually unprecedented.” (1)
Here’s the number that matters more. The economy’s most recent reading is 1.5% growth, down from 2.1% the quarter before. (1)
Meanwhile, a gallon of regular gas is averaging about $4.47 — up nearly $1.30, more than 40%, from a year ago. The Fed’s preferred inflation gauge is still running around 3.7%, well above its 2% target. The job market, to be fair, is holding up: employers added 162,000 jobs in August, and unemployment sits at a low 4.1%.
None of that makes the president wrong to want faster growth. It just means the gap between the number at the podium and the number in your checking account is the thing to watch. Here are the six numbers that tell the real story — and what each one means for your money.
1. 20%: a number seen once in 78 years
That single 20%-range quarter in 2020 wasn’t prosperity — it was a bounce off a cliff. The economy had just shrunk at a 28% annualized rate, so the “record” growth barely got us back to even. (2)
Real, sustainable growth in a mature economy runs closer to 2% to 3% a year. When someone promises a number that’s only ever appeared during a crisis recovery, treat it as a goal, not a forecast.
2. 1.5%: how fast the economy is actually growing
The latest data has growth at 1.5% a year, slowing from 2.1%. (1) That’s not a recession — but it’s not “roaring,” either. It’s an economy shifting into a lower gear.
For your own planning, 1.5% is the honest baseline. Build your budget and your retirement math around the economy you have, not the one being promised.
Quick aside — most internet financial advice comes from people who weren’t alive during the last recession. I’ve been writing about money for more than 35 years. Want rock-solid advice? Sign up for the free Money Talks Newsletter. Takes 10 seconds. No fluff. No spam.
3. 4.1%: the part of the economy that’s actually holding up
Here’s where the president deserves some credit: the job market is solid. Employers added 162,000 jobs in August — well above what forecasters expected — and the unemployment rate is a low 4.1%.
That’s a genuine bright spot, and I won’t pretend otherwise. People working is worth a lot. The trouble is what those paychecks are buying.
4. $4.47: what you’re actually paying at the pump
As I mentioned above, a gallon of regular now averages about $4.47, up nearly $1.30 — more than 40% — from a year ago. That’s a tax on every mile you drive, and no growth statistic refunds it.
You can claw a little of it back. For example, Upside is a free app that pays you real cash — up to 25¢ a gallon — at stations you already use, including Shell, BP, and Exxon.
Claim an offer, pay with your usual card, and the cash back lands in the app. It stacks on top of your credit card rewards, and you can cash out to PayPal, your bank, or gift cards. Two-car family? That adds up fast. Check it out here.
5. 3.7%: prices are still outrunning the target
The president said growth doesn’t cause inflation. Maybe — but inflation is still here: the Fed’s preferred gauge is running around 3.7%, nearly double its 2% goal. You feel it not just at the pump, but in the quiet creep of everyday bills.
To offset inflation, lower your expenses by using a tool like Rocket Money. It connects securely to your accounts and puts every subscription on one screen — cancel the ones you don’t want in a few taps. It negotiates cable, internet, and phone bills and flags fee hikes before they hit.
Members have saved over $880 million in canceled subscriptions to date. See all your subscriptions now.
6. The growth rate that’s actually in your control
You can’t dial up the nation’s GDP. You can make sure your own money is growing faster than 1.5%.
A slow economy is exactly when it pays to know whether your savings and investments are pulling their weight — and whether you’re leaving tax breaks or Social Security strategy on the table.
One solution: hire a second set of expert eyes. One way to do it: services like SmartAsset match you free with up to three fiduciary advisors — pros legally required to put your interests first. If you've got $100,000 or more invested get matched with a fiduciary advisor free. First appointments are also often free.
The bottom line
So is the economy about to grow 20%? Almost certainly not — the last time it happened, we were climbing out of a pandemic, and it barely counted. Could growth pick up from 1.5%? Sure. I hope it does.
But your financial life doesn’t run on the number a president says at a podium. It runs on what you pay for gas, what creeps onto your credit card, and whether your savings are working as hard as you are. Those you can control today, no matter what the economy does next quarter.
Don’t let a booming headline talk you into spending like the boom already landed in your account. Build for the economy you actually have.
Sources: 1. CNBC; 2. U.S. Bureau of Economic Analysis;
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