The data shows that Trump did not “build” a great economy. He inherited it.


WASHINGTON – President Donald Trump’s campaign speeches can cover many topics, but his main call continues to be that he built “the greatest economy we have had in our history” before the COVID-19 pandemic and he can do it again. The latest NBC News / Wall Street Journal poll shows he has an edge with voters on this issue and that Trump’s economy will likely be a big topic this week at the Republican convention.

But the real story of the Trump economy, and the president’s role in building it, is not so straightforward. If you compare the key economic indicators of Barack Obama’s second term to the first three years of Trump’s time (that is, before the pandemic hit), the data shows a continuation of trends, not a drastic change. This suggests that Trump hasn’t built anything new; rather, he inherited a fairly good position.

Start with the broadest measure of economic health, gross domestic product. In 2016, Trump said he was unhappy that the country’s economic growth rate was below 3% per year. Trump said he believed the economy could grow at an annual rate of over 4%.

But the numbers show that the average quarterly economic growth under Trump, 2.5%, was almost exactly what it was under Obama in the second term, 2.4%.

Besides the general similarity, two things stand out from these numbers. First, Trump hasn’t come close to his 4% figure. Second, the growth that started during Obama’s second term and essentially continued under Trump was enough to create an economy that even Trump considers excellent. In other words, there might be something to be said for slow, steady growth over an extended period.

Obama’s and Trump’s employment figures show a similar story.

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The president rightly blames himself for the low unemployment rate during his presidency. In December 2019, the unemployment rate was just 3.5%, the lowest in 50 years.

However good that number is, when Trump took office the rate was already 4.7%. This figure is quite low by historical standards (lower than all of the 80s and most of the 90s and 2000s). In December 2017, that was the lowest number since the Great Recession. In fact, Obama saw a much sharper drop in unemployment during his second term, a 3.3 drop in the rate, than Trump in his first three years, a 1.2 point drop.

That’s not to mar the remarkably low unemployment under Trump, but it’s hard to ignore that the unemployment trajectory under Obama was down. Again, the numbers look like a continuation of a trend, not something new.

And the job creation figures show more evidence for this view.

On average, there were more jobs added each month during Barack Obama’s second term than during Trump’s first three years.

On average, the country created 215,000 new jobs per month during Obama’s second term. In Trump’s first three years the number was 182,000. Both are good numbers and if you look at the employment data plotted on a graph, the rise since 2011 actually looks pretty consistent.

But that’s the point. Since the resumption of the last recession, the numbers look like a slow and steady progression. There is no sudden change when Trump takes office in 2017. There was nothing dramatic about employment numbers after 2011 until the pandemic struck this spring.

There is a great indicator that suggests a change under Trump, the rise in the stock market. The Dow Jones Industrial Average notably took off when it won the presidency.

On December 31, 2019, the DJIA was at 28,538. That was a 56% increase from 18,332, which was the day Trump was elected in 2016. It’s a pretty impressive race. (For the Dow, we use Election Day as a starting metric because investors can and often do react to big news.)

To be clear, Obama’s numbers weren’t bad on that measure. From its second election day until 2016, the Dow Jones climbed 38%. But Trump can rightly boast of that rise, and this week the DJIA has recovered most of what he lost in 2020.

The real question is: how important is the Dow Jones to the overall health of the economy? Other lingering issues, such as persistently high unemployment and a projected decline in GDP for the year, only underscore the fact that this measure comes close to telling the whole story of the economy. .

A president who takes credit for the economy is of course nothing new. It is a centuries-old tradition in politics. And there are parts of the economy that Trump can rightfully celebrate. But the idea that the president somehow saved an economically struggling nation upon his arrival just isn’t borne out in the data.

If Trump is re-elected, he would no longer be rebuilding the economy; he would undertake a new task which he would not have faced upon his arrival in Washington. He may be the right fit for the job, but there is little evidence in his record as president to say so.


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