Now playing
01:25
Trump adviser: President's GDP tweet was false
Now playing
03:21
Teachers under pandemic stress are quitting: I didn't feel safe
Barbers from King's Cutz give haircuts indoors while observing COVID-19 safety restrictions on March 13, 2021 in Los Angeles, California.
Mario Tama/Getty Images
Barbers from King's Cutz give haircuts indoors while observing COVID-19 safety restrictions on March 13, 2021 in Los Angeles, California.
Now playing
01:43
US consumer prices increased in March
WASHINGTON, DC - DECEMBER 01: Chairman of the Federal Reserve Jerome Powell testifies during a Senate Banking Committee hearing about the quarterly CARES Act report on Capitol Hill December 1, 2020 in Washington, DC.  Treasury Secretary Steven Mnuchin also testified at the hearing. (Photo by Susan Walsh-Pool/Getty Images)
Susan Walsh/Pool/Getty Images
WASHINGTON, DC - DECEMBER 01: Chairman of the Federal Reserve Jerome Powell testifies during a Senate Banking Committee hearing about the quarterly CARES Act report on Capitol Hill December 1, 2020 in Washington, DC. Treasury Secretary Steven Mnuchin also testified at the hearing. (Photo by Susan Walsh-Pool/Getty Images)
Now playing
02:06
Fed chief: The economy is about to grow more quickly
marketplace africa nigeria cotton exports farmers spc_00002226.png
marketplace africa nigeria cotton exports farmers spc_00002226.png
Now playing
04:57
How international demand for Nigerian cotton is suiting well for small farmers
marketplace africa fintech flutterwave valuation african innovation spc_00040411.png
marketplace africa fintech flutterwave valuation african innovation spc_00040411.png
Now playing
04:49
How Flutterwave's unicorn status could sprout more innovation in African fintech
Motor vehicle traffic moves along the Interstate 76 highway in Philadelphia, Wednesday, March 31, 2021. Looking beyond the $1.9 trillion COVID relief bill, President Joe Biden and lawmakers are laying the groundwork for another of his top legislative priorities — a long-sought boost to the nation's roads, bridges and other infrastructure that could meet GOP resistance to a hefty price tag. (AP Photo/Matt Rourke)
Matt Rourke/AP
Motor vehicle traffic moves along the Interstate 76 highway in Philadelphia, Wednesday, March 31, 2021. Looking beyond the $1.9 trillion COVID relief bill, President Joe Biden and lawmakers are laying the groundwork for another of his top legislative priorities — a long-sought boost to the nation's roads, bridges and other infrastructure that could meet GOP resistance to a hefty price tag. (AP Photo/Matt Rourke)
Now playing
00:49
Levi's CEO on corporate tax: 28% pushes the threshold
A fast food restaurant stands empty in a Manhattan neighborhood on February 05, 2021 in New York City. New government jobs numbers released on Friday showed that while 49,000 jobs were added in January, the United States economy is still down nearly 10 million jobs lost since before the pandemic. (Photo by Spencer Platt/Getty Images)
Spencer Platt/Getty Images
A fast food restaurant stands empty in a Manhattan neighborhood on February 05, 2021 in New York City. New government jobs numbers released on Friday showed that while 49,000 jobs were added in January, the United States economy is still down nearly 10 million jobs lost since before the pandemic. (Photo by Spencer Platt/Getty Images)
Now playing
00:54
Initial jobless claims increase to 744,000
Now playing
03:01
A return to the office brings 'some anxieties, some anticipation'
Traffic flows past the Main Street Train Station on the Interstate 95 bridge through downtown Richmond, Va., Wednesday, March 31, 2021.  Looking beyond the $1.9 trillion COVID relief bill, President Joe Biden and lawmakers are laying the groundwork for another of his top legislative priorities — a long-sought boost to the nation's roads, bridges and other infrastructure that could meet GOP resistance to a hefty price tag. (AP Photo/Steve Helber)
Steve Helber/AP
Traffic flows past the Main Street Train Station on the Interstate 95 bridge through downtown Richmond, Va., Wednesday, March 31, 2021. Looking beyond the $1.9 trillion COVID relief bill, President Joe Biden and lawmakers are laying the groundwork for another of his top legislative priorities — a long-sought boost to the nation's roads, bridges and other infrastructure that could meet GOP resistance to a hefty price tag. (AP Photo/Steve Helber)
Now playing
01:31
Lyft co-founder: Higher corporate tax to fund infrastructure 'makes sense'
People shop in the historic Charleston City Market, South Carolina on April 4, 2021 amid the Covid-19 pandemic. (Photo by Daniel SLIM / AFP) (Photo by DANIEL SLIM/AFP via Getty Images)
DANIEL SLIM/AFP/Getty Images
People shop in the historic Charleston City Market, South Carolina on April 4, 2021 amid the Covid-19 pandemic. (Photo by Daniel SLIM / AFP) (Photo by DANIEL SLIM/AFP via Getty Images)
Now playing
03:08
IMF upgrades 2021 economic outlook
Construction workers build the "Signature Bridge," replacing and improving a busy highway intersection at I-95 and I-395 on March 17, 2021 in Miami, Florida. The Florida Department of Transportation is building the project in partnership with the Miami-Dade Expressway Authority and its contractor, the Archer Western-de Moya Group Joint Venture. The infrastructure project will ease traffic congestion, connect communities with downtown neighborhoods, and provide an iconic bridge for Miami's skyline. The entire project is scheduled for completion in the fall of 2024 at the cost of $818 million. (Photo by Joe Raedle/Getty Images)
Joe Raedle/Getty Images
Construction workers build the "Signature Bridge," replacing and improving a busy highway intersection at I-95 and I-395 on March 17, 2021 in Miami, Florida. The Florida Department of Transportation is building the project in partnership with the Miami-Dade Expressway Authority and its contractor, the Archer Western-de Moya Group Joint Venture. The infrastructure project will ease traffic congestion, connect communities with downtown neighborhoods, and provide an iconic bridge for Miami's skyline. The entire project is scheduled for completion in the fall of 2024 at the cost of $818 million. (Photo by Joe Raedle/Getty Images)
Now playing
01:47
US economy added 916,000 jobs in March
Resturant Yurkevcih Pkg 1
CNN
Resturant Yurkevcih Pkg 1
Now playing
02:55
Restaurants are still struggling, but see hope on the horizon
Now playing
03:41
Fed's James Bullard: We'll let inflation run above target for some time
Now playing
03:38
Stimulus package aims to get mothers back to work
Presumptive Democratic presidential nominee former Vice President Joe Biden delivers a speech at the William Hicks Anderson Community Center, on July 28, 2020 in Wilmington, Delaware. Biden addressed the fourth component of his Build Back Better economic recovery plan for working families, how his plan will address systemic racism and advance racial economic equity in the United States.
Mark Makela/Getty Images
Presumptive Democratic presidential nominee former Vice President Joe Biden delivers a speech at the William Hicks Anderson Community Center, on July 28, 2020 in Wilmington, Delaware. Biden addressed the fourth component of his Build Back Better economic recovery plan for working families, how his plan will address systemic racism and advance racial economic equity in the United States.
Now playing
01:42
Infrastructure is President Biden's next focus. Here's what that means
(CNN Business) —  

The US government on Friday will release its report on how much the American economy grew in the third quarter. The number will have ramifications for business, investment and, of course, politics.

With the midterm elections less than two weeks away, the big question isn’t whether the number will be good — it’s whether it will be good enough to match the expectations set by President Donald Trump.

The President has touted the second quarter’s whopper growth number: 4.2%, the highest since 2014.

Most economists think the third quarter’s figure won’t be that high, as the rush of energy generated by the tax cuts and government spending starts wearing off.

Currently, forecasts range from a low of 2.13% from the Federal Reserve Bank of New York to a high of 3.9% from the Atlanta Fed. A survey of economists conducted by Refinitiv fell in between the two at 3.3%. That would still be significantly higher than the 2.3% average over the 37 quarters of the latest economic expansion.

The President has campaigned on his stewardship of the economy, and has appeared to focus blame for any slowdown to interest rate increases by the Federal Reserve.

Yet most forecasters see growth naturally declining to levels more consistent with America’s aging workforce and sluggish productivity.

“We’ll drift back down to the two percent range, which I think is consistent with the longer term dynamics of the economy,” says Robert Murphy, an associate professor economics at Boston College who served as a senior economist on former President Bill Clinton’s Council of Economic Advisers.

Strong growth over the past year hasn’t been just a function of fiscal stimulus. Consumer sentiment is spiking, and household interest payments, as a percentage of disposable income, are the lowest on record. Business investment in new buildings, equipment and research has picked up after an energy-related dip in 2015 and 2016. Exports surged in the second quarter, which was partly prompted by fear of retaliation to Trump tariffs on China.

Paychecks have even started to grow more quickly, with a 3.3% annualized increase in usual weekly earnings in the third quarter, enough to beat inflation. That’s been a long time coming, given an unemployment rate that in September sank to a nearly 50-year low.

The Fed has been treading carefully as the labor market has tightened, trying to bring interest rates back to a neutral level without upsetting markets or slamming the brakes on growth, even in the face of the near-constant criticism from Trump.

But there are still dangers on the horizon.

The Federal Reserve’s Beige Book, a quarterly survey of business conditions across the county released Wednesday, contained warning signs of rising inflation pressure.

Companies in many regions said they were struggling to find enough workers to fill available jobs. Businesses also face escalating costs for raw materials like steel and aluminum, which they attributed to tariffs as well as high gas prices.

IHS Markit’s monthly purchasing manager’s index, which also surveys a broad range of businesses and is seen as a good indication of where the economy is heading, recorded strong optimism in October. But it also confirmed a sharp rise in the cost of labor, raw materials and other business “inputs” — costs that are being passed on to consumers.

The housing market has become another soft spot, as rising mortgage rates have stalled new home sales, which fell 5.5% in September to their lowest point in a year.

Meanwhile, global growth has drooped. Earlier this month the International Monetary Fund downgraded its forecast for 2018 from 3.9% to 3.7%, warning of the danger of a severe trade slowdown if current retaliatory measures snowball.

In the United States, the manufacturing sector has been rattled by a string of worse-than-expected earnings reports from industrial companies like Caterpillar (CAT), which depends heavily on the decelerating Chinese market. “US manufacturers no longer appear immune to the global growth and tariff concerns,” wrote Goldman Sachs analysts in a note on Wednesday.

And this time, if the economy stumbles, there’s little government cushion to fall back on.

Murphy drew a parallel to his time as a senior economist in the Clinton administration, when unemployment was nearly as low and the economy had been expanding for nearly a decade. But at that time, the federal government was racking up budget surpluses. Now, tax cuts have propelled the deficit well above historical norms, as a percentage of gross domestic product.

“In a situation where you’ve got an economy at full employment, we’re hitting on all cylinders, this is a time when you should see the budget deficit coming down,” Murphy says. “My fear is that down the road, we won’t have the fiscal tools to use.”