What’s been the impact of his tax cuts and trade wars? But this aid is lapsing and if it is not replaced there is likely to be a major negative impact on Americans’ living standards. Beyond the infrastructure spending, Trump’s economic policies include across-the-board tax cuts for individuals and a slashing of corporate taxes down to 15 percent from 35 percent. When he took office in January 2017 there were 145 million Americans in employment. 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. 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. 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. The S&P 500 has also benefited from the Fed. The U.S. Bureau of Economic Analysis released its first estimate for 2019’s fourth quarter GDP growth and for the full year. This largely extended the trend that Donald Trump inherited, rather than marking an upward shift in growth. “Every policy decision we make must pass a simple test: does it create more jobs and better wages for Americans?” he said. In the three years to 2019 the average rate of growth was 2.5 per cent – bang in line with the trend he inherited. “Our focus is on helping the folks who work in the mailrooms and the machine shops of America,” claimed the President. Job gains (and losses) The United States experienced some of its best years of job gains in 2014 … 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. Claim: "Years of economic decay are over" because Trump "reversed the failed economic policies of the previous administration." The top 1 per cent received 20 per cent of the benefits. 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. At the start of Donald Trump’s presidency in January 2017, the economy was healthy. 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. If, and more likely when, there is another recession the deficit could easily top $2 trillion. It allows our most engaged readers to debate the big issues, share their own experiences, discuss real-world solutions, and more. Yet many economists doubt the jobs recovery is going to be rapid on current policy. It has since bounced back strongly, but hasn't regained all its losses. After peaking in 2017 at $130 billion, goods exports to China have fallen $23 billion or 18% to $107 billion in 2019. "We had tremendous increases in living standards," said economic adviser Lawrence Kudlow. So Your State Legalized Cannabis. What’s happened to GDP, jobs, incomes and, perhaps Trump’s most favoured metric, the stock market, since he won the 2016 election? All Rights Reserved, This is a BETA experience. Vaccine, Stimulus Optimism Quickly Dashed By Worries Over New Covid-19 Strain. Any current economic growth is thanks to these policies. I cover technology companies, worldwide economies and the stock market, EY & Citi On The Importance Of Resilience And Innovation, How Digital Workflows Helped Save Basketball During The Pandemic, Impact 50: Investors Seeking Profit — And Pushing For Change, Michigan Economic Development Corporation With Forbes Insights, What Investors Need To Know As Moderna’s Vaccine Rolls Out. On top of this researchers found that deliberately targeted retaliatory tariffs from China on US exports hit firms in Republican-voting areas the hardest. … 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. Democrats argue that Trump inherited an economy that was … GDP growth hasn’t reached Trump’s 3% or higher goal. The US economy was then hit by the biggest economic contraction ever recorded as a result of the pandemic. This is in direct contrast to his statements that it would be easy to eliminate not just the deficit but also the Federal debt. 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. Prior to becoming an equity analyst, I spent 16 years at IBM in a variety of sales and manufacturing positions. Want to bookmark your favourite articles and stories to read or reference later? Will Highly Overvalued Tesla Stock See A Correction After S&P Inclusion? “New factories will come rushing back to our shores,” promised Trump in 2016. Independent Premium Comments can be posted by members of our membership scheme, Independent Premium. The unemployment rate has dropped steadily from its peak of 10% in late 2009. 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. Trade deficit has grown despite the trade wars. While the Phase One trade deal has been signed with China, its outlook was murky even before the Wuhan coronavirus hit. Wage growth has taken a step up during Trump’s Presidency, but fell off a bit in 2019. 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!" Trump inherited a decent economy that continues to be decent, and has managed to avoid tipping it into a recession. In 2017 Donald Trump and his Republican party cut personal taxes. The gains are largely driven for the same reasons as the Dow, but one interesting aspect is that the $1 trillion market cap companies (Apple, Microsoft, Amazon, and Alphabet/Google) have had an outsized influence on the index. Additionally, Obama added over 1.6 million more jobs in his last three years in office compared to Trump’s first three years. Economists have expected wage growth to be stronger as the economy recovered from the Great Recession, but it seems to be stuck at around 3%. Unemployment rate is about as low as it can go. 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. In remarks and a question-and-answer session, Mr. Trump continued to portray himself as a savior of what had been a moribund economy, trumpeting … During Obama’s eight years in office the trade deficit ranged from $384 billion in 2009 due to the Great Recession to $550 billion in 2011 as the U.S. economy recovered earlier than the rest of the world. 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 fiscal deficit … Between February and April 2020 22 million jobs were lost. Manufacturing jobs rebounded in Trump’s first two years in office, but their growth rate slowed dramatically in 2019. Trade. And, of course, this year the US jobs market has suffered its gravest crisis since the Great Depression of the 1930s. 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. The Covid hurricane has plainly upended the US economy, crushing activity by a record amount and sending joblessness soaring. A commemorative tweet from former President Barack Obama Monday touting the "longest streak of job creation in American history" on the … During his campaign, Trump promised to repeal and replace Obamacare. 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. Yet, allowing for the immense hit to jobs and livelihoods over the past 10 months – which would arguably have happened whoever was in the White House – how does Trump’s overall record on the economy look? 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. President Trump and former President Obama both claim credit for the economy. Wage growth is better but seemingly stuck around 3%. Are you sure you want to mark this comment as inappropriate? 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 … The Unemployment Rate Was Falling Faster under Obama in 2014 and 2015 than in Trump’s First … And their doubts have been vindicated. The recession is over for the rich, but the working class is far from recovered Perhaps the best case Trump can … At one stage in March shares were just 3 per cent higher than when Trump won the 2016 election. 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. 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. After Canada and Mexico, China is the third largest buyer of U.S. goods. in Industrial Engineering from Stanford University and a Postgraduate Diploma in Economics from the University of Sussex, England. I have a B.S. Please continue to respect all commenters and create constructive debates. 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. 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 … 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. The existing Open Comments threads will continue to exist for those who do not subscribe to Independent Premium. That was respectable – but nothing out of the ordinary. 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. You can find our Community Guidelines in full here. It has not “exceeded expectations,” as he claimed in a speech Tuesday in New York. The Phase One deal includes very ambitious goals for China to buy U.S. agricultural products. "Wealthy people did well, but non-wealthy people did the best. © 2020 Forbes Media LLC. But the key phrase here is “presided over,” because Trump didn’t really do much more than that. 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. Trump in fact never "turned" the economy off, refusing to issue national stay-at-home orders and leaving it up to state … The typical justification for income tax cuts is that they encourage entrepreneurship and boost overall growth, which ultimately means more tax is collected. Under Trump’s first three years the labour force participation rate rose slightly to 63.5 per cent. For the fourth quarter GDP growth came in at 2.1%, which was the same as the September quarter and for the full year it fell from 2.9% in 2018 to 2.3% last year. A result of Trump’s trade war with China is U.S. companies and farmers selling fewer goods to it. Yet the comeback since then has been stunning – with shares recovering all the losses of the crash and hitting a new record high in September. Indeed, on the contrary, there is evidence that tariffs hurt American consumers by pushing up import costs. 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. The most insightful comments on all subjects will be published daily in dedicated articles. “The plumbers, the carpenters, the cops, the teachers, the truck drivers, the pipe-fitters, the people that like me best.”. 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. Our journalists will try to respond by joining the threads when they can to create a true meeting of independent Premium. 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. The economy has in fact created seven million jobs," wrote former Trump chief economic advisor Gary Cohn and former Trump chair of the Council … 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. Mr. Trump and his aides cite these developments as among his biggest achievements. There has been some evidence of US companies importing less from abroad as a result of Trump’s trade hostilities towards China. Should You Buy Intuitive Surgical Stock At $775 Levels? 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 … 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. “Over 10,000 brand-new, beautiful factories.” After losing 60,000 — can you believe that — factories … 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 when Trump tells voters why he deserves to win re-election, he tends to focus on the economy. It appears that the tax cuts that started in 2018 helped for one year but don’t have much of a carryover effect. Start your Independent Premium subscription today. 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. What’s Next? But it did little to reverse the major fall from the 67 per cent peak seen at the turn of the Millennium. 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. Are you sure you want to delete this comment? 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. Beyond the infrastructure spending, Trump’s economic policies include across-the-board tax cuts for individuals and a slashing of corporate taxes down to … 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. 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. Its goals looked to be overly ambitious and didn’t tackle the really tough items on the agenda. 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. 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. It is more challenging to add jobs when employment is high, but Trump touted that 25 million jobs could be added over 10 years once he entered office, which looks like a stretch given the current hiring rate. President Donald Trump presides over an administration that has seen an enormous level of controversy that could overshadow a burgeoning 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. Trump portrays the Obama era as sluggish. Trump and his economic advisers initially pledged to radically decrease federal spending in order to reduce the country's budget deficit.   Although he wasn't successful, Trump launched many initiatives that weakened the law. Dow Jones Today: Stocks Slide As U.K. Triggers Tier 4 Lockdown; Coronavirus Mutation And Tesla Stock In Focus. 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”? 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. So in that sense there is scant benefit to US ordinary workers from the trade wars. Want an ad-free experience?Subscribe to Independent Premium. Over the next three and a half years it shot up by 55 per cent. This is a shortfall to Trump’s claim that the economy could grow 4%, 5% or maybe even 6% when he was President. 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… Since April some 12 million jobs have been created, bringing the jobless rate back down to 7.9 per cent. Employers had added jobs for 76 months straight — the longest hiring … You may opt-out by. But despite the boost to companies’ cash flows, investment by firms has fallen rather than increased. Most economists doubted getting back to this GDP growth rate was possible. 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. Federal budget deficit ballooning above $1 trillion. 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. He has delivered on promises to … “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. 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. 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. Please be respectful when making a comment and adhere to our Community Guidelines. Claim: "In 2016, the Department of Labor predicted that Americans would continue dropping out of the workforce in record numbers." Due to the sheer scale of this comment community, we are not able to give each post the same level of attention, but we have preserved this area in the interests of open debate. 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. Does it measure up to the President ’ s first two years in office, but fell a... S why I believe it is time to establish a National goal of reaching 4 per cent the. Of 2019 includes very ambitious goals for China to buy U.S. agricultural products as it can go or under. Increases in living standards, '' said economic adviser Lawrence Kudlow abroad as a result of the.... Have been created, bringing the jobless rate exploded from 3.5 per cent 6.3. Growth and for the full year he deserves to win re-election, tends. 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