Trump's Make-Believe Economic Record

During last night's State of the Union address, Trump heavily focused on his supposed economic achievements and tried to contrast his record with one of decline under Obama. He described a world in which the economy had been long suffering under the Obama administration, but was now prosperous and strong thanks to his policies. Of course, the entire story is preposterous. While it is true that the economy is quite strong today (although large structural problems remain), that strength is a result of a largely unbroken trend that began under President Obama. Indeed, most macroeconomic indicators show either a continuation or slight decline in the pace of economic progress under Trump compared to Obama's 2nd term.

First, job growth has slowed moderately under Trump. From January 2013 to January 2017 under Obama, monthly job growth averaged 217,000 jobs. From January 2017 to December 2019 under Trump, meanwhile, it has averaged 177,000 jobs. Similarly, real median household income grew at an average annual rate of 2.6% from 2012 to 2016, while it has risen at an annual rate of only 1.1% in 2017 and 2018.

The only macro indicator that has seen even a slight pick-up has been economic growth, but even this will very likely be the same as under Obama after the 2020 data is in. In Obama's second term, quarterly GDP growth averaged 2.37% while so far quarterly GDP growth under Trump has averaged 2.54% - already very similar. For 2020, however, the IMF projects that growth will be 2%, meaning that quarterly GDP growth for Trump's four years will likely average 2.41%, essentially identical to the 2.37% average growth under Obama. 

And this doesn't even get into the significant decline in other key indicators of economic well-being under Trump. After the uninsured rate fell from 16% in 2012 to 11% in 2016 thanks to Obamacare, the trend has sharply reversed under Trump and the uninsured rate rose to 14% in 2018. Furthermore, after air pollution declined by 20% from 2012 to 2016 thanks to tighter environmental regulations under Obama, that trend has also gone backwards and pollution rose by 6% from 2016 to 2018. Even Trump's EPA estimates that this increased pollution will cause about 1,400 more deaths per year. As can be seen, it is simply not true that Trump has overseen an economic revival since 2016, and actually almost every macro-economic trend has declined to some extent under Trump. For more on NDN's work on trade and economic policy under the Trump administration, please click here.