When Donald Trump was running for president last year, he never failed to portray the U.S. economy in the direst terms, with sky-high jobless rates, an anemic manufacturing sector and huge trade deficits as far as the eye could see.
“Look, our country is stagnant. We’ve lost our jobs. We’ve lost our businesses. We’re not making things anymore, relatively speaking,” he said during one of the presidential debates.
What a difference an election makes.
These days, President Trump sees a lot to like in the U.S. economy and frequently cites positive statistics to make the case that things are getting better.
“Prosperity is coming back to our shores, because we’re putting American workers and families first,” Trump said in his weekly address to the nation on Saturday. “We continue to see incredible results.”
Not only is the Dow Jones industrial average hitting records on a regular basis, breaking 22,000 for the first time ever last week, but the U.S. economy grew by 2.6 percent in the second quarter of this year, he notes.
“Economic growth has surged to 2.6 percent nationwide. You have to understand what that means. Nobody thought that number was going to happen,” Trump told an audience in West Virginia on Thursday.
He has even changed his tune on the job market.
During the campaign Trump frequently derided the monthly jobless rate put out by the Bureau of Labor Statistics, saying it didn’t reflect the number of people who had given up looking for work and thus were technically out of the labor market. The true unemployment rate was much higher, perhaps as much as 42 percent, he said.
When Fox News host Bill O’Reilly noted that the jobless rate fell to 4.9 percent in February 2016, Trump replied, “These are phony numbers put out by politicians to make them look good. When you hear 5 percent and 4.9 percent, it’s not the right number.”
These days, however, Trump seems to like the BLS numbers just fine. In his weekly address, Trump cited the fact that the unemployment rate fell to 4.3 percent in July.
“Since our election, we’ve added more than one million new jobs, and the good news keeps pouring in,” Trump said in West Virginia.
But how true is the notion that the U.S. economy has suddenly turned a corner?
Douglas Holtz-Eakin, president of the American Action Forum, says some good things are happening these days, such as the surge in stock prices. Holtz-Eakin, who served under both Bush administrations and was an adviser to Arizona Sen. John McCain, likes Trump’s focus on deregulation, which he thinks could help businesses.
But Holtz-Eakin says on the whole the economy isn’t really performing all that much differently than it has in the recent past.
“By and large, we still have the same strengths. We continue to see the unemployment rate fall. We continue to see jobs created. We continue to have the same weaknesses. We don’t see wages rising rapidly enough to greatly raise the standard of living,” he says.
It’s true that consumers and businesses are expressing more confidence in the economy. But so far there’s no evidence they are spending any more than they were last year, he notes.
As for Trump’s claims about the unanticipated second-quarter growth rate of 2.6 percent? That’s about average these days. The economy grew by 2.2 percent during the same quarter last year, and it actually reached 2.9 percent for all of 2015, when Trump said the economy was in such dismal shape.
It is true that stock prices have been rising steadily since Trump’s election, with the Dow up more than 20 percent. But economists disagree about what’s behind the increase.
And even if the economy were doing a lot better, it’s not clear how much credit Trump could take. So far most of the items on his agenda, such as repealing the Affordable Care Act and overhauling the tax code, have been stalled in Congress and don’t seem likely to go anywhere anytime soon.