Ranking the Trump Economy
S E E D E D C O N T E N T
The president brags about U.S. prosperity. But conditions improved more under his predecessors. (Even Carter.)
Stock and bond markets are flashing warning signs of a U.S. recession just over the horizon, and President Donald Trump is having none of it:
The United States has a great economic story to tell. Number one in the World, by far!
— Donald J. Trump (@realDonaldTrump) January 22, 2019
Investors may be gloomy about the vanishing gap between short- and long-term U.S. Treasury yields, the dreaded yield-curve inversion that tends to forecast recessions, but the president is focusing on the bright side.
Last year was the best year for American Manufacturing job growth since 1997, or 21 years. The previous administration said manufacturing will not come back to the U.S., “you would need a magic wand.” I guess I found the MAGIC WAND - and it is only getting better!
— Donald J. Trump (@realDonaldTrump) January 21, 2019
The U.S. economy is indeed doing well in many ways . Job gains and consumer spending are robust, wages are rising, inflation isn’t a problem. Things have slowed down lately and optimism has waned a bit, but the conventional economic indicators have been strong.
In Trump’s view, that entitles him to claim that his administration has produced “the strongest economy in the history of our nation,” as he put it last June. But while the recession forecasts have not been proven right, Trump’s boast can pretty much be proven wrong.
Measured by 14 gauges of economic activity and financial performance, the U.S. economy is not doing as well under Trump as it did under all but one of the four Republicans and three Democrats who have occupied the White House since 1976.
These yardsticks, compiled by Bloomberg, assess a broad range of activity — from job and wage growth to the strength of the real estate and auto industries to the health of stock and bond investments that deliver security to workers and retirees alike. They are:
- Total nonfarm payrolls
- Manufacturing jobs
- Value of the dollar compared to major currencies
- Gross domestic product
- Federal budget deficit (or surplus) as a percentage of GDP
- Disposable income per capita
- Household debt as a percentage of disposable income
- Home equity
- Car sales
- Hourly wages
- Productivity
- Bond-market performance
- The Standard & Poor’s 500 Index of U.S. stocks
- Gap between U.S. and global stock performance
By compiling and ranking the annual improvement in these measures under each of the last seven presidents, an average economic-progress score can be assigned. The scoring gives equal weight to each measure to avoid confusion over valuations that anyone could consider arbitrary.
By these measures, we reported two years ago, the economy under President Bill Clinton was No. 1. It still is, having strengthened the most during his years in office, 1993 to 2001. President Barack Obama, who took office in 2009 during the worst recession since the Great Depression, left in 2017 after the second-biggest improvement . President Ronald Reagan is No. 3 (1981-1989), followed by Presidents George H.W. Bush (1989-1993) and Jimmy Carter (1977-1981).
That leaves Trump and President George W. Bush, whose years in office ended in 2009 with the financial crisis that plunged the economy into its deepest decline in 80 years. While the No. 6 Trump economy shows no signs of replicating the disaster of the No. 7 Bush economy, he already lags Carter’s performance.
Ranking U.S. Prosperity
Best-to-worst economic performance, 1977-2019, under seven presidents
For all of its weakness, the Carter economy included the largest annual increase in nonfarm payrolls and tied with Reagan’s for the second-most annualized growth in gross domestic product. Carter’s economy also saw the biggest annual increase in home equity.
Trump benefits from GDP growth that leads the Group of Eight industrial nations, the lowest unemployment since the 1960s and, as he correctly tweeted on Jan. 21, “the best year for American Manufacturing job growth since 1997.” But Clinton tops the list of 14 measures in three categories, is second in six indicators and third in three of them. Obama wins four of the 14 measures and ranks second in two of them.
The Trump years have been no better than average and mostly below average in 12 of the 14 measures. The bond market suffered its worst performance the past two years than in any other presidency since Carter. Anemic productivity and a widening deficit as a percentage of GDP are the worst since George W. Bush was president. The dollar’s 3.2 percent annualized decline and GDP growth of 2.24 percent give Trump no better than a No. 5 ranking.
What worries investors most under Trump is the increase in uncertainty about the economy.
That’s reflected in wide stock-market swings tracked by the 100-day volatility of the S&P 500 and a similar measure of the Nasdaq index, which are at their highest levels since 2012. Another cause for concern is the narrowing interest-rate gap between bonds and money market instruments, or the so-called flattening yield curve when short-term rates overtake long-term ones. At least four previous recessions ensued when the yield curve inverted, as part of it did in December , which helps explain the market’s recent fluctuations and convulsions.
Uh-Oh
Spread between 2- and 10-year yield on U.S. Treasuries
Source: Bloomberg
Trump didn’t help himself when he installed Jerome Powell as chair of the Federal Reserve instead of giving Janet Yellen a second term. Under Yellen, volatility in the stock and bond markets was lower than at any point under her predecessors Ben S. Bernanke and Alan Greenspan during the preceding 28 years. Yellen’s Fed focused on growth, productivity and increasing the labor participation rate if it meant eschewing tighter credit policies. Powell initially revealed no such assurance and pushed borrowing costs up, asserting the central bank’s independence to Trump’s chagrin.
And squeezing the brakes on a Trump economy that the president can’t seem to make great again.
(With assistance from Shin Pei)
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I know it's a bit long but Bloomberg has a monthly limit on accessing their articles so I went ahead and posted the whole thing.
The blue and red highlights are my own.
I always appreciate your concise compilation of facts and data an any given subject. trump has been riding the last economic waves created by his predecessor. it won't be long until his tax giveaways to the wealthy collapse under their own weight and another recession occurs.
Is the Trump 'economy' real?
Or is it merely a continuation of previous cycles?
And is 'it continuing' only because the full effects of the Trump's alleged management have yet to come into play?
If Trump can't even point to an improved economy to help wash out the bad taste left with most Americans by his chaos Presidency what the hell else has he got going for him? His failed Tax break for the Rich and Corporations?
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He can always fall back on what got him elected, insults, grandiose promises, intimidation and threats.
Uhhh......I don't think there are enough people who would buy that the second time around to get him elected again. So he will need to come up with a way to do the same thing, as that is all he knows how to do, but, in a different way so that it looks like he is wiser and more average citizen friendly. All of which belies his real self.
My opinion.
I agree, the ones who would fall for that in itself already have.
Now he has the bully pulpit and the power to sway things as well.
For instance, I think he is out to make the Venezuela problem worse to help increase the tension at the border to justify his border wall crap.
I look for him to do Whatever it takes to keep power the next election.
I stopped underestimating this man long ago !
I will never again underestimate the stupidity of the American electorate.
Don't forget, LIES.
Covered, grandiose promises
I guess we just work off of 2 different definitions. I do not consider a promise the same as a lie, no matter how grandiose it is.
Trump isn't number one...Must be ''fake news''.
Rump is more like #2, like when you go the bathroom and mommy asks you - 'Did you do a number 1 or a number 2?'
Well, he's doing better than Dubya according to your seed, Arkansas Hermit. lol
True Trout.
What made me chuckle was how the Trump economy hasn't even been as strong as Carters. You gotta know that hurt! (smile)
.
Perhaps Trump will point to his big success with Foxconn in Wisconsin to show how well his policies are really doing.
I know, right????
I was reading those graphs and thinking to myself...."Carter did better???? Really????"
Granted, I graduated high school in 1980 and had only a dim idea of what was going on, but I knew things were pretty bad economy wise
Bested by a peanut farmer...LMAO