US economy under Trump: Is it the greatest in history? – Reality Check – BBC News

Card with President Trump on the left and the quote "Our economy is the envy of the world. Perhaps the greatest economy in the history of our country."

Claim: President Trump often says the US economy is on an historic high, perhaps the greatest it’s ever been.

Speaking at his State of the Union address in February, he reinforced those claims by hailing his pro-growth policies which he says have helped Americans with jobs and wages.

Reality Check verdict: It’s true the economy has been doing well – but there have been periods when it was even stronger.

And the trade war with China, rising tensions in the Middle East and fears over the health of the global economy have unsettled markets at various points, and led the US central bank, the Federal Reserve, to lower interest rates.

President Trump has repeatedly tweeted that the current US economy is the greatest in American history.

What do the figures show?

The annual rate of growth in GDP – the value of goods and services in the economy – has generally been strong.

US GDP growth since 2009

For 2019, the data shows an annual average growth of 2.3%, ending the year at 2.1% for the fourth quarter.

This is significantly less than the 5.5% peak achieved in the second quarter of 2014 during the Obama presidency.

And if you go further back, there were times in the 1950s and 1960s when GDP growth was even higher.

“If you choose to look at the health of the economy based on GDP, Mr Trump’s claims are suspect when compared to the national economic boom of the post-War years,” says Megan Black, assistant professor of history at the London School of Economics.

Stock market soars… then wobbles

President Trump has also highlighted the rising value of US financial markets – in particular the Dow Jones Industrial Average, which follows the shares of 30 major US companies.

Chart shows Dow Jones index under president Trump

It’s true the Dow reached record highs under his administration. Mr Trump’s supporters argue that his corporation tax cuts along with his US-focused policies, his clampdown on bureaucracy and his promises of infrastructure investment have all helped.

The index was highly volatile at times during 2019, reflecting worries about the trade confrontation with China, and a gloomier outlook for the global economy.

But it’s begun 2020 by notching up more gains with investors apparently positive about growth prospects.

Jobs and wages

So, what’s happening with employment and wages?

In his State of the Union address, President Trump said unemployment was at its lowest for half a century. He also said that since his election, seven million more Americans were now on the employment roll.

US unemployment rate chart

In January this year, the unemployment rate was 3.6%. It was more than fifty years ago, in December 1969, when the unemployment rate was lower at 3.5%.

As for the numbers in employment, almost seven million more people were recorded as employed in January this year than when Mr Trump was elected in November 2016.

However, this figure takes into account the final months of the Obama presidency. Since Mr Trump took office in January 2017, 6.7 million jobs have been added.

President Trump also highlighted record low levels of unemployment amongst specific groups.

“The unemployment rate for African Americans, Hispanic Americans and Asian Americans has reached the lowest levels in history,” he said.

The African American and Hispanic American unemployment rate hit 5.5% and 3.9% respectively in September 2019 – the lowest rates recorded since the US Labor Department started collecting these statistics in the 1970s.

Worker at Ford truck plantImage copyrightGETTY IMAGES

For Asian Americans, records only go back to 2003. These show the unemployment rate was the lowest ever recorded in June 2019 at 2.1%.

In all these groups, unemployment levels had been decreasing throughout the Obama years, after peaking around 2009.

President Trump also told Congress in his State of the Union speech that “wages are rising fast” and “incomes are soaring.”

Average hourly earnings growth did continue throughout 2019, by 3.1% on average – a generally upward trend which began during President Obama’s administration.

US wages line chart

But that’s not the whole story.

After inflation is taken into account, real wages increased by 0.6% in December 2019, and peaked at 1.9% in February under President Trump, according to official data.

This is lower than the real wage increases of more than 2% that President Obama oversaw in 2015.

US real wages

Household income has also been growing – but the rate of increase has slowed in the last few years.

In 2018, median household income was $63,179, which official data says is not statistically different from the previous year.

This was reported to be the first year it had barely moved after three years of growth.

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Comments

  • Clyde Duncan  On February 19, 2020 at 6:36 pm

    I tell Donald Trump supporters:

    ‘You are entitled to your own opinion – You are NOT entitled to your own facts.’

  • Clyde Duncan  On February 26, 2020 at 5:15 pm

    Why Trump’s Vendetta Against Obama Is a Losing Proposition

    The president’s incompetence overshadows his malevolence.

    Nancy LeTourneau | Washington Monthly

    Barack Obama took advantage of an anniversary to poke at one of the lies being repeated by his successor.

    7:46 AM – Feb 17, 2020

    @BarackObama

    Eleven years ago today, near the bottom of the worst recession in generations, I signed the Recovery Act, paving the way for more than a decade of economic growth and the longest streak of job creation in American history.

    Since his administration began, Trump has attacked Obama’s record of job creation and touted his own. Perhaps long-time readers here at the Washington Monthly will enjoy the fact that I intend to expose that lie based on information provided by Steve Benen and Kevin Drum. Here’s Benen:

    As we discussed after the release of the latest report from the Bureau of Labor Statistics, Trump has now been in office for three full years (36 months), and during that time, the economy has created 6.56 million jobs. In the final full three years of Obama’s presidency, the economy created 8.08 million jobs.

    Of course, Kevin Drum put the specifics into a chart at Mother Jones.

    It will surprise no one that data means nothing to Trump.

    3:40 PM – Feb 17, 2020

    @realDonaldTrump

    Did you hear the latest con job? President Obama is now trying to take credit for the Economic Boom taking place under the Trump Administration. He had the WEAKEST recovery since the Great Depression, despite Zero Fed Rate & MASSIVE quantitative easing. NOW, best jobs numbers….

    As the saying goes, Obama has taken up residence in Trump’s head — RENT-FREE.

    I like what Mahua Moitra [MP India Parliament] said better: My memory is getting in the way of Traitor Trump’s LIES.

    Jonathan Chait recently documented another way that Trump’s efforts to undo Obama’s legacy are failing.

    One of the Obama administration’s most effective climate initiatives was tightened regulations of auto emissions, which will reduce carbon emissions by billions of tons. Trump, of course, is trying to roll it back. The good news is that Trump is almost certainly too incompetent to pull it off in his first term.

    When regulatory agencies write new rules, they have to follow some fairly
    complicated legal procedures, which often have to hold up under judicial scrutiny.

    Historically, agencies win about 80 percent of the time against legal challenges.

    But Trump’s regulations lose about 90 percent of the time, because his administration is staffed with incompetent hacks.

    The courts will soon be fighting over Trump’s plan to weaken auto-emission standards. Trump is highly likely to lose, because, as two new reports show, the incompetence of his regulators reached almost mind-boggling proportions.

    The reports Chait referred to come from an article by Robinson Meyer that details how the Trump administration’s attempt to kill the auto-emission standards has been a “complete debacle” and one from Coral Davenport predicting a dead end for Trump’s efforts.

    What also caught my eye was the fact that Trump’s regulations – or attempts to roll back Obama’s regulations – have failed in court about 90 percent of the time.

    That number comes from the Institute for Policy Integrity, which has been tracking this administration’s record in the courts. Of the 70 cases they have followed,

    TRUMP HAS WON 4 and LOST 66. As Chait points out, typically federal agencies have won about 80 percent of the time, so this administration’s record is worse than abysmal.

    In writing about the effort to roll back Obama’s fuel-efficiency standards, Davenport identified the problem.

    In January, administration staff members appointed by President Trump sent a draft of the scaled-back fuel economy standards to the White House, but six people familiar with the documents described them as “Swiss cheese”, sprinkled with glaring numerical and spelling errors – such as “Massachusettes”, with 111 sections marked “text forthcoming”.

    The cost-benefit analysis showed that consumers would lose more money than they would gain. And, because the new auto pollution rule lacks the detailed technical analyses required by law, the regulations would be unlikely to withstand court challenges…

    More basic issues holding up the regulations point to another problem: The skeleton crew of inexperienced political appointees who are heading the drafting process may not be up to a job that would usually be handled by career federal workers with decades of expertise.

    As Chait rightfully suggested, Trump’s actual goal of humiliating Obama can’t be included in the analysis. So, his incompetent staff are left with trying to manipulate the numbers and the science, which do not support the president’s goals.

    FOR TRUMP, THINGS LIKE MATH, SCIENCE and EXPERTISE are ANATHEMA. His only concern is to prop up his own narcissistic ego and demean anyone he views as a threat.

    That is why Trump’s vendetta against Obama’s legacy will always be a losing proposition. His incompetence overshadows his malevolence.

  • starrinnicaragua  On February 26, 2020 at 6:17 pm

    I wouldn’t be surprised if part of the “incompetence” turns out to be due to bureaucrats with principles, doing what they can to protect existing good legislation.

  • wally n  On February 26, 2020 at 8:09 pm

    You guys going there? bringing a dead horse to the derby? maybe you are right give obama credit, for the three trillion dollar debt to China, give it a rest. BTW bureaucrats don’t set policy, he should find them and fire their asses soon.

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