WASHINGTON – President Trump’s campaign speeches may cover many topics, but his primary appeal remains that he is “the largest economy we’ve built in our history for the COVID-19 pandemic and he can resume it. The latest NBC News / Wall Street Journal poll shows he has an edge with voters on that issue and the Trump economy is likely to be a major topic at the Republican convention this week.
But the true story of Trump’s economy, and the president’s role in building it, is not that simple. If you compare key economic indicators from Barack Obama’s second term in office to the first three years of Trump’s time (which is before the pandemic hit), the data shows a continuation of trends – not a dramatic shift. It suggests that Trump did not build anything new, he rather inherited a pretty good situation.
Start with the broadest measure of economic health, gross domestic product. In 2016, Trump said he was not satisfied that the country’s economic growth was below 3 percent a year. Trump said he thought the economy could grow at a better-than-4 percent annual rate.
But the figures show that the average quarterly economic growth under Trump, 2.5 percent, was almost exactly what it was under Obama in the second term, 2.4 percent.
Unlike the general agreement, two things spring from those figures. At first, Trump did not come close to his 4 percent figure. Second, the growth that began in Obama’s second term and continued substantially under Trump was enough to create an economy that even Trump finds to be great. In other words, something can be said for slow slow growth over a longer period of time.
Job numbers for Obama and Trump leave a similar story.
The president rightly takes credit for having low unemployment during his presidency. In December of 2019, the unemployment rate was a whopping 3.5 percent, the lowest it was in 50 years.
However, as good as that number was when Trump took office, the rate was already at 4.7 percent. That figure is fairly low by historical standards (lower than all of the 1980s than most of the 1990s and 2000s). In December of 2017, it was the lowest that the number had been since the Great Recession. In fact, Obama saw a much steeper drop in unemployment in his second term, a 3.3 drop in the rate then Trump did in his first three years, a decline of 1.2 points.
That is not to be confused with the remarkably low unemployment rate under Trump, but it is hard to ignore that the unemployment track under Obama had been down. Again, the figures seem to be continuing a trend, not something new.
And the employment numbers show more evidence for that view.
On average, more jobs were added in Barack Obama’s second months than there were in the first three years.
On average, the country created 215,000 new jobs a month in Obama’s second term. In Trump’s first three years, the figure was 182,000. They are both good numbers and if you look at the job data placed on a graph, the turnout since 2011 actually looks pretty consistent.
But that’s the point. Since the recovery from the last recession, the figures appear to have been a slow, steady build-up. There is no sudden change when Trump takes office in 2017. There was nothing dramatic in the post-2011 figures until the pandemic hit this spring.
There is one major indicator that suggests a change under Trump, the rise in the stock market. The Dow Jones Industrial Average got off to a particularly good start when he won the presidency.
As of December 31, 2019, the DJIA was at 28,538. That was up 56 percent from 18,332, where it was the day Trump was elected in 2016. That’s a pretty impressive run. (For the Dow, we use election day as a starting point, because investors can often react to major news events.)
To be clear, Obama’s figures were not bad about this measure. From its second election day until 2016, the Dow climbed 38 percent. But Trump can rightly complain about that climb and this week the DJIA has recovered most of what it lost in 2020.
The real question is: How important is the Dow to the overall health of the economy? Other persistent problems, such as persistently high unemployment and an expected decline in GDP for the year, only highlight how one measure does not come close to telling the whole story of the economy.
A president who takes credit for the economy is obviously nothing new. It is a traditional time tradition in politics. And there are parts of the economy that Trump can rightfully run. But the idea that the president somehow saved a nation that was struggling economically when he arrived is not carried in the data.
If Trump were re-elected, he would not be rebuilding the economy – he would take on a new task he did not face when he first arrived in Washington. He may be the right person for that job, but there is not much evidence in his record as president that he is.
