The US economy is booming under President Donald Trump, who he reached Saturday, but his administration is embroiled in a series of controversies that could overshadow his first 100 days in office. When President Trump took office in January 2017, he inherited an economy that was in the midst of its worst recession since the Great Depression, following the end of the Great Recession in June 2009. The administration has been surrounded by a series of scandals, from the firing of FBI Director James Comey to the resignation of Secretary of State Rex Tillerson, that may have overshadowed economic conditions under his predecessor Barack Obama. [Sources: 10, 20, 21]
By the time Trump took over the Oval Office last January, unemployment had fallen to 4.1% and fallen to 3.8% in the first three months of the year, before falling to 4.8%. While the economy performed a major U-turn under Obama, his administration acknowledged its unfinished business, which has helped wages grow faster. Job growth slowed somewhat under Trump, but did not collapse like the COVID-19 crisis that led to mass unemployment in 2009 under former President George W. Bush. [Sources: 20, 22, 23]
In the Trump era, the deficit has begun to rise to levels not seen since the Bush administration, even as Trump promised to begin deficit reduction as soon as possible in 2017. Trump’s 2017 tax cuts would add $1.5 trillion to the debt, but not trigger a recession like Obama did in 2009. [Sources: 6, 23]
The Trump administration would do well not to follow through on its threat of tariffs, which could dampen the US economic outlook. The stimulating effects of the tax cuts could be offset by a brake on growth by tariffs. [Sources: 0, 15]
Job growth is broadly in line with that of the Trump presidency, driven by a strong economy; even during the Covid ’19 recession, job creation was better under Trump than under Obama and Trump. Job creation during the Trump administration is consistent with an improvement in the labor market, a turnaround that took place in the early years of the Obama administration. [Sources: 1, 6, 9]
Second, the growth that began during Obama’s second term, and largely continued under Trump, is likely to produce an economy that even Trump thinks is great. So Trump can take credit for ensuring steady economic growth during his first two years in office, not just the first three. [Sources: 11, 14]
Where other presidents have done, Trump inherited a stable economy entering the longest period of growth in history. President Trump’s average economic growth has outpaced Barack Obama’s. Assuming that the average annual growth rate in the first two years of Trump’s presidency is well below the 4% he promised, it is well above the 3.5% promised during Obama’s second term. [Sources: 1, 3]
At 50%, Trump’s approval rating on the economy is still well below the October level that earned him re-election. If Trump sees a similar level of improvement between now and the election, confidence in the economy would be the highest of any president re-elected in the first two years of his presidency since George W. Bush. [Sources: 16]
The data show that the economy is still doing better than it was under the Obama administration. Fortunately, the benefits of deregulation were appreciated and discussed in greater detail in the Defining Economic Conditions report, and a drastic increase in funding by Congress would certainly help as well. In the same report, Crews gives a more detailed analysis of the economic impact of Trump’s tax cuts and regulatory reforms. [Sources: 5, 7, 17]
The Trump administration has generally followed on from the improvements of the last years of Obama’s presidency. Compared with the Obama administration’s economic performance during his first two years in office, the data show a continuation of this trend, not a dramatic change. Trump also benefited from Obama’s economic stewardship, with GDP growth consistently between 2% and 3% under his watch. [Sources: 2, 6, 14]
US real GDP averaged 2.6% per year for eleven quarters after Trump’s election, which he promised, and the Dow Jones Industrial Average rose 46% to 25% under Trump at this point in Obama’s presidency. The figures show that there was no significant change in GDP growth in Trump’s first two years in office compared to the one during his second term, but a significant increase in the number of months of economic growth under his administration. [Sources: 13, 14, 18]
Trump’s record on economic growth is likely to be weighed down by the current recession, triggered by a health care crisis that the White House said early on would not hurt the economy. There is no doubt that Trump was elected on an election platform that promises to boost economic growth, but there is little evidence that it could have grown during his presidency. [Sources: 4, 19, 22]
Meanwhile, the Trump administration seems to have little interest in addressing the widespread economic impact of coronavirus. In a budget proposal for February 2020, it expects the massive Tax Cuts and Jobs Act, which includes an individual income tax credit that expires in 2025, to be extended. The Trump administration’s budget proposals for 2021 call for $66.6 billion for the Education Department. [Sources: 8, 12]
Sources:
[0]: https://www.aljazeera.com/economy/2020/9/29/data-v-spin-the-truth-about-trumps-economy [1]: https://www.cnn.com/2020/02/18/politics/trump-v-obama-economy-fact-check/index.html [2]: https://www.politifact.com/factchecks/2020/feb/06/donald-trump/no-economy-didnt-suddenly-get-strong-under-donald-/ [3]: https://www.axios.com/presidents-economy-gdp-trump-5d042c64-ace6-4904-8602-40003f917719.html [4]: https://www.forbes.com/sites/chuckjones/2020/02/10/trumps-economic-scorecard-3-years-in-office/ [5]: https://www.americanprogress.org/issues/economy/reports/2020/10/05/491101/10-ways-trump-administration-failed-rural-america-10-ways-overcome/ [6]: https://www.businessinsider.com/9-charts-comparing-trump-economy-to-obama-bush-administrations-2019-9 [7]: https://www.usatoday.com/story/news/factcheck/2020/04/25/fact-check-did-pandemic-bring-economy-down-obamas-high-point/5145786002/ [8]: https://elizabethwarren.com/plans/protecting-from-coronavirus [9]: https://www.theguardian.com/us-news/2020/sep/29/why-joe-biden-is-better-than-donald-trump-for-the-us-economy [10]: https://www.cbpp.org/research/economy/chart-book-tracking-the-post-great-recession-economy [11]: https://www.vox.com/2019/2/5/18210757/state-of-union-2019-economy-fact-check [12]: https://www.investopedia.com/comparing-the-economic-plans-of-trump-and-biden-4843240 [13]: https://www.marketwatch.com/story/trump-didnt-transform-the-economy-its-mostly-the-same-as-it-was-under-obama-2019-11-12 [14]: https://www.nbcnews.com/politics/meet-the-press/data-show-trump-didn-t-build-great-economy-he-inherited-n1237793 [15]: https://taxfoundation.org/tariffs-trump-trade-war/ [16]: https://news.gallup.com/poll/313070/trump-economic-ratings-no-longer-best-class.aspx [17]: https://www.hoover.org/research/trumps-economic-policies-assessment-part-1 [18]: https://www.afr.com/world/north-america/15-charts-that-compare-the-trump-vs-obama-economy-20190821-p52j88 [19]: https://apnews.com/article/139089576d0f2a103b85e94097827534 [20]: https://www.cbsnews.com/news/trump-economy-after-one-year-tax-cuts-trade/ [21]: https://www.cnbc.com/2018/09/07/how-trump-has-set-economic-growth-on-fire.html [22]: https://www.factcheck.org/2020/07/trumps-numbers-july-2020-update/ [23]: https://www.washingtonpost.com/business/2020/09/05/trump-obama-economy/
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