Despite a large unfunded tax cut – the kind of policy that usually puts rocket boosters under growth – the rate of US GDP growth peaked at 3.9 per cent in the final quarter of 2017 under Trump. The Unemployment Rate Was Falling Faster under Obama in 2014 and 2015 than in Trump’s First … Does it measure up to the President’s high claims? While the Phase One trade deal has been signed with China, its outlook was murky even before the Wuhan coronavirus hit. However, even by this measure, Claim: "Years of economic decay are over" because Trump "reversed the failed economic policies of the previous administration." Prior to becoming an equity analyst, I spent 16 years at IBM in a variety of sales and manufacturing positions. In the previous 20 years the average growth rate had been just 2.5 per cent. Mr Trump came to power with unrealistic promises to create 25m jobs and supercharge economic growth, and to that end cut taxes and boosted spending, widening the … The top 1 per cent received 20 per cent of the benefits. The state of the union, in economic terms, is … Yet many economists doubt the jobs recovery is going to be rapid on current policy. Trump inherited a decent economy that continues to be decent, and has managed to avoid tipping it into a recession. The U.S. Bureau of Economic Analysis released its first estimate for 2019’s fourth quarter GDP growth and for the full year. At one stage in March shares were just 3 per cent higher than when Trump won the 2016 election. Opinions expressed by Forbes Contributors are their own. Unemployment rate is about as low as it can go. Using the comparable period in Barack Obama’s second term (January 2013 to December 2015) the number of jobs also rose by around 7 million. Manufactured goods imports from 14 traditional Asian low-cost countries as a share of domestic manufacturing fell from 13 per cent in 2018 to 12 per cent in 2019, the first drop in a decade on this measure put together by the consulting firm Kearney. Want to bookmark your favourite articles and stories to read or reference later? The most repeated phrase of the Republican National Convention was that President Donald Trump created the greatest economy the world has ever seen. But this aid is lapsing and if it is not replaced there is likely to be a major negative impact on Americans’ living standards. But shares also fell at a faster rate than the Wall Street Crash in February this year as the pandemic terrified investors and traders. After peaking in 2017 at $130 billion, goods exports to China have fallen $23 billion or 18% to $107 billion in 2019. And the jobless rate exploded from 3.5 per cent to 14.7 per cent. One group that has been especially hard hit is soybean farmers as their exports to China have fallen almost $20 billion over the past two years. Hassett did correct Trump, who tweeted Monday morning that "the GDP Rate (4.2%) is higher than the Unemployment Rate (3.9%) for the first time in over 100 years!" “Our focus is on helping the folks who work in the mailrooms and the machine shops of America,” claimed the President. Claim: "In 2016, the Department of Labor predicted that Americans would continue dropping out of the workforce in record numbers." © 2020 Forbes Media LLC. The Covid hurricane has plainly upended the US economy, crushing activity by a record amount and sending joblessness soaring. What’s happened to GDP, jobs, incomes and, perhaps Trump’s most favoured metric, the stock market, since he won the 2016 election? President Trump has been in office for three years, which is enough time to analyze how the economy is doing vs. his statements on how it would perform. In 2017 Donald Trump and his Republican party cut personal taxes. Yet the Kearney analysts warn this was more attributable to a drop in imports from the traditional Asian economies rather than a significant rise in US manufacturing output. But despite the boost to companies’ cash flows, investment by firms has fallen rather than increased. And their doubts have been vindicated. And the US government’s $2.2 trillion stimulus package has supported many incomes so far this year – indeed around three quarters of unemployed Americans according to one estimate earned less than the new $600 a week jobless benefit that was introduced. The Federal budget deficit has increased over 68% in Trump’s three years in office and is expected to exceed $1 trillion in 2020 and beyond. President Trump has not transformed the U.S. economy for the better, as he promised he would. Trump didn’t do himself any favors with the … Trump Did Nothing to Help the Economic Boom (Bloomberg Opinion) -- The public gives President Donald Trump very low marks for his handling of the coronavirus pandemic and race relations. Here’s Why Biogen Stock Can Offer Over 35% Gains, released its first estimate for 2019’s fourth quarter GDP growth and for the full year, Federal budget deficit has ballooned to $1 trillion levels not seen in a non-recessionary environment, even when corporate profits were essentially flat, Phase One trade agreement with China looks like an overpromise and under-deliver deal, it appears that tax cut was essentially a sugar rush for one year, Trump’s claim that the economy could grow 4%, 5% or maybe even 6% when he was President, Trump touted that 25 million jobs could be added over 10 years, Obama added over 1.6 million more jobs in his last three years in office compared to Trump’s first three years, but they are helping to balloon the federal budget deficit, led to valuation multiples increasing while company profits were flat last year, led to higher valuation levels while company profits were stagnant last year, markets will need earnings growth to rise significantly this year, expected to exceed $1 trillion in 2020 and beyond, be easy to eliminate not just the deficit but also the Federal debt, One group that has been especially hard hit is soybean farmers, to be very hard to achieve under the best of circumstances, there are already rumblings that these won’t be met. n August Donald Trump boasted to the Republican National Convention that, before the coronavirus pandemic, he had “built the strongest economy in the history of the world” in the three years after he became president. The US President made some audacious promises when he was elected. After Canada and Mexico, China is the third largest buyer of U.S. goods. The recession is over for the rich, but the working class is far from recovered Perhaps the best case Trump can … In contrast with Trump’s numerous claims about building the greatest economy in history, Zandi found that by most measurements, the country’s economic health under both administrations is quite similar. What’s Next? You can also choose to be emailed when someone replies to your comment. One of the flashiest economic claims that Donald Trump made when he was running for president in 2016 was that it was possible to raise the growth rate of America’s gross domestic product to … On top of this researchers found that deliberately targeted retaliatory tariffs from China on US exports hit firms in Republican-voting areas the hardest. A result of Trump’s trade war with China is U.S. companies and farmers selling fewer goods to it. That's a big increase, it means the economy is growing almost twice as fast under Trump as it did under Obama. Beyond the infrastructure spending, Trump’s economic policies include across-the-board tax cuts for individuals and a slashing of corporate taxes down to … Please be respectful when making a comment and adhere to our Community Guidelines. He also complained that “households are making less today than they were in the year 2000”. As recently as last month, as the coronavirus crisis raged, and millions remained unemployed, Trump tweeted, "My Administration and I built the greatest economy in history, of any country, turned it off, saved millions of lives, and now am building an even greater economy than it was before." The outlook for a slower economy caused the Fed to lower interest rates and increase its balance sheet, which led to the stock market’s rallying in 2019 even when corporate profits were essentially flat. But this largely continued a rising trend that began in 2010. Are you sure you want to delete this comment? GDP growth hasn’t reached Trump’s 3% or higher goal. Job gains (and losses) The United States experienced some of its best years of job gains in 2014 … The rate of 2.1 million new jobs a year would also have left him short of his campaign pledge of creating 25 million new jobs over a decade. Wage growth has taken a step up during Trump’s Presidency, but fell off a bit in 2019. The most repeated phrase of the Republican National Convention was that President Donald Trump created the greatest economy the world has ever seen. Trump also cut corporate taxes significantly in 2017, saying that this would encourage business investment. Ever since he unexpectedly prevailed over Hillary Clinton in the 8 November 2016 presidential election, Donald Trump has been boasting about his achievements in boosting the US economy. So Your State Legalized Cannabis. It appears that the tax cuts that started in 2018 helped for one year but don’t have much of a carryover effect. That was respectable – but nothing out of the ordinary. Over the past 10 years it has fallen to 3.6% and has been bounced between 3.5% and 3.7% over the past nine months. Trump said he would be 'the greatest jobs president God ever created'. GDP: Trump is the first president to have GDP consistently higher than 3%, President Barack Obama … It has not “exceeded expectations,” as he claimed in a speech Tuesday in New York. The S&P 500 has also benefited from the Fed. For much of the past four years Trump’s twitter feed while he has been in office has been dominated by boasts about the performance of the stock market. At the start of Donald Trump’s presidency in January 2017, the economy was healthy. “It’s time to start thinking big once again,” he said in a speech to the New York Economic Club in September 2016. Except in 2018 when the tax cut seems to have helped the job market, job growth has been just over 2 million per year under Trump. This is in direct contrast to his statements that it would be easy to eliminate not just the deficit but also the Federal debt. Trump's trade policies seek to reduce the U.S. trade deficit. Did he deliver? This is a shortfall to Trump’s claim that the economy could grow 4%, 5% or maybe even 6% when he was President. Trump may also be getting a pass on the economy because Americans are more concerned with other problems, including race relations and especially the pandemic itself. Start your Independent Premium subscription today. Claim: Because of the work of U.S. President Donald Trump, the American economy added 11.6 million jobs in summer and fall 2020 \u2014 regaining nearly half the jobs lost at the start of the COVID-19 pan… But it did little to reverse the major fall from the 67 per cent peak seen at the turn of the Millennium. This largely extended the trend that Donald Trump inherited, rather than marking an upward shift in growth. Manufacturing jobs rebounded in Trump’s first two years in office, but their growth rate slowed dramatically in 2019. The unemployment rate has dropped steadily from its peak of 10% in late 2009. During Trump’s three years in office, it has fallen 1.2% and the decrease was essentially a continuation from the Great Recession’s recovery. Democrats argue that Trump inherited an economy that was … While this is positive for a portion of Americans, two major reasons the stock markets have risen the past three years is due to the tax cuts (but they are helping to balloon the federal budget deficit) and the Federal Reserve keeping interest rates low and flooding the markets with cash (due to concerns about the economy’s growth rate). There has been some evidence of US companies importing less from abroad as a result of Trump’s trade hostilities towards China. I provide independent research of technology companies and was previously one of two analysts that determined the technology holdings for Atlantic Trust (Invesco's high net worth group), a firm with $15 billion under management. Joe Biden has argued that President Donald Trump didn’t so much build a strong economy as inherit one. “New factories will come rushing back to our shores,” promised Trump in 2016. In the three years before COVID-19, the U.S. economy under Trump performed about the same as it did during the last three years of Obama's presidency. But the key phrase here is “presided over,” because Trump didn’t really do much more than that. Between February and April 2020 22 million jobs were lost. “I’m going to be the greatest jobs president God ever created” was Donald Trump’s pledge when he officially announced he was running for President in June 2015. The markets will need earnings growth to rise significantly this year. By the end of 2019 that had increased to 152 million, pointing to 6.3 million new jobs created. Under Trump the trade deficit has grown to over $600 billion the past two years despite trying to decrease it via the trade wars he has started. Since April some 12 million jobs have been created, bringing the jobless rate back down to 7.9 per cent. Under Trump’s first three years the labour force participation rate rose slightly to 63.5 per cent. Want an ad-free experience?Subscribe to Independent Premium. Additionally, his claim to having improved the economy falls short; so far he has brought in 186,000 fewer jobs than Obama did in his last seven months. President Trump has advocated for greater trade protectionism and imposed a series of tariffs on China, Mexico, Canada, the European Union, and other trading partners. Yet more than 60 per cent of the tax savings went to people in the top fifth of the income ladder, according to the independent Tax Policy Centre. Independent Premium Comments can be posted by members of our membership scheme, Independent Premium. And this year the American economy has contracted at the fastest rate seen in any post-war presidency. Please continue to respect all commenters and create constructive debates. Are you sure you want to mark this comment as inappropriate?   Although he wasn't successful, Trump launched many initiatives that weakened the law. Create a commenting name to join the debate, There are no Independent Premium comments yet - be the first to add your thoughts, There are no comments yet - be the first to add your thoughts. As recently as last month, as the coronavirus crisis raged, and millions remained unemployed, Trump tweeted, "My Administration and I built the greatest economy in history, of any country, turned it off, saved millions of lives, and now am building an … Most economists doubted getting back to this GDP growth rate was possible. The number of manufacturing jobs in the US grew by around 500,000 under Trump’s first three years to 12.8 million in 2019. Trump, who currently touts statistics about economic growth, criticized them when they didn’t go in his favor in the past. The numbers say no, You may not agree with our views, or other users’, but please respond to them respectfully, Swearing, personal abuse, racism, sexism, homophobia and other discriminatory or inciteful language is not acceptable, Do not impersonate other users or reveal private information about third parties, We reserve the right to delete inappropriate posts and ban offending users without notification. The economy has in fact created seven million jobs," wrote former Trump chief economic advisor Gary Cohn and former Trump chair of the Council … I provide independent research of technology companies and was previously one of two analysts that determined the technology holdings for Atlantic Trust (Invesco's high. As for policy in a second term, analysts at the US credit rating agency Moody’s estimate that Joe Biden’s infrastructure spending plans would boost the US economy more than Donald Trump’s proposed tax cuts. If, and more likely when, there is another recession the deficit could easily top $2 trillion. Mr. Trump and his aides cite these developments as among his biggest achievements. And, as Americans prepare to go to the polls again, how credible is Trump’s claim that, if re-elected on 3 November, he would “again build the greatest economy in history”? Trade. Trade deficit has grown despite the trade wars. His first action was the U.S. … A first estimate of $10.5 trillion in spending cuts over 10 years was reported on January 19, 2017,[190]although cuts of … Trump portrays the Obama era as sluggish. Has Trump improved the lives of Black people. Should You Buy Intuitive Surgical Stock At $775 Levels? While GDP growth crossed over 3% in a few quarters the past three years, on a full year basis GDP growth hit a high point of 2.9% in 2018, the year that Trump’s tax cut took effect. There was a huge jump in average wages in the current crisis, though this reflected the big drop in a surge of redundancies for low-income workers and other statistical distortions rather than a genuine pay rises for Americans in the pandemic. Any current economic growth is thanks to these policies. The most insightful comments on all subjects will be published daily in dedicated articles. One of the flashiest economic claims that Donald Trump made when he was running for president in 2016 was that it was possible to raise the growth rate of America’s gross domestic product to 4 per cent a year. Will Highly Overvalued Tesla Stock See A Correction After S&P Inclusion? On employment, the U.S. economy added 6.6 million jobs in Trump’s first three years, shy of the 8.1 million payroll gains in the last three years under Obama. Trump and his economic advisers initially pledged to radically decrease federal spending in order to reduce the country's budget deficit. With it falling back to 2.3% in 2019 it appears that tax cut was essentially a sugar rush for one year. "Wealthy people did well, but non-wealthy people did the best. in Industrial Engineering from Stanford University and a Postgraduate Diploma in Economics from the University of Sussex, England. President Trump and former President Obama both claim credit for the economy. Page 2 The stock market: President Trump frequently points to the stock market as evidence of his success, even though it is a poor proxy for the nation’s overall economic well-being since nearly half of Americans do not own stock, either directly or indirectly. The S&P 500 has risen just a bit less in percentage terms than the Dow. Economists also point out that the stock market is not, despite what the president claims, some kind of barometer of the underlying performance of the US economy and gauge of national prosperity. Wage growth is better but seemingly stuck around 3%. “Every policy decision we make must pass a simple test: does it create more jobs and better wages for Americans?” he said. And the deadlock in negotiations with the Democrats in Congress on extending the $2 trillion stimulus package from March is seen as creating a serious risk of more business failures and another spike in joblessness. Like him or not, these are great economic … The promise that they would pay for themselves has not materialized as the Federal budget deficit has ballooned to $1 trillion levels not seen in a non-recessionary environment. Share prices, as represented by the index of America’s largest 500 companies, did rise sharply from the moment he was elected president in November 2016. Indeed, on the contrary, there is evidence that tariffs hurt American consumers by pushing up import costs. It has since bounced back strongly, but hasn't regained all its losses. What’s been the impact of his tax cuts and trade wars? 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. He created a prosperous economy, he says, and will do … Before joining Atlantic Trust I was the Internet Security Software analyst for Smith Barney (where I authored the most comprehensive industry report “Internet Security Software: The Ultimate Internet Infrastructure”) and an Enterprise Server Hardware analyst at Salomon Brothers. It’s worth noting that Trump threatened to call off negotiations with Congress on 7 October over extending the assistance to households not because he saw them as insufficiently generous but because he said the Congress Democrats’ proposals would help “cities and states” that tend to vote Democrat. "We had tremendous increases in living standards," said economic adviser Lawrence Kudlow. These were going to be very hard to achieve under the best of circumstances, but with the Wuhan coronavirus there are already rumblings that these won’t be met. Its goals looked to be overly ambitious and didn’t tackle the really tough items on the agenda. Trump didn’t do himself any favors with the trade wars he started and even the signing of the Phase One trade agreement with China looks like an overpromise and under-deliver deal given the goals that were agreed to. Vaccine, Stimulus Optimism Quickly Dashed By Worries Over New Covid-19 Strain. Additionally, Obama added over 1.6 million more jobs in his last three years in office compared to Trump’s first three years. The Dow 30 Industrials has risen over 10,000 points or just under 60% since Trump was elected. Just like the Dow, the Fed lowering interest rates and flooding the economy with cash has led to higher valuation levels while company profits were stagnant last year. It allows our most engaged readers to debate the big issues, share their own experiences, discuss real-world solutions, and more. Our journalists will try to respond by joining the threads when they can to create a true meeting of independent Premium. You can find our Community Guidelines in full here. “Over 10,000 brand-new, beautiful factories.” After losing 60,000 — can you believe that — factories … These have led to valuation multiples increasing while company profits were flat last year. In the three years to 2019 the average rate of growth was 2.5 per cent – bang in line with the trend he inherited. On median household incomes, the picture from the US census bureau did show a strong 10 per cent real-terms increase between 2016 and 2019. Claim: President Trump says he built the greatest ever US economy prior to the coronavirus outbreak and that now it's recovering faster than ever. “The plumbers, the carpenters, the cops, the teachers, the truck drivers, the pipe-fitters, the people that like me best.”. Employers had added jobs for 76 months straight — the longest hiring … He claimed that his trade wars (along with pressure on US chief executives) would encourage American companies to bring back their manufacturing production from Asia and Latin America and elsewhere. Median weekly earnings for full-time workers grew by around 3.6 per cent between the final quarter of 2016 and the final quarter of 2019. … As Americans prepare to go to the polls four years on, Ben Chu looks into what promises Donald Trump has – and hasn’t – delivered, Find your bookmarks in your Independent Premium section, under my profile. But, as we have seen, there has been little evidence of any uplift in GDP growth in recent years. Did Trump Create or Inherit the Strong Economy? In fact, 82% of Trump voters said the economy was the issue that mattered most to them, according to preliminary exit poll data from The New York Times.And 8 in 10 Trump supporters cited the economy and jobs as their top motivator in deciding who to vote for, based on a large AP VoteCast survey of more than 100,000 voters conducted in the days before and on Election Day. T tackle the really tough items on the contrary, there is evidence that tariffs hurt American consumers by up! 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