Trump Kicked the Sluggish Economy Into High Gear
Obama wants credit for faster growth, but compare Obama’s last 21 months to Trump’s first 21.
Federal Reserve Chairman Jerome Powell said last month that the U.S. is experiencing “a remarkably positive set of economic circumstances.” The superb numbers speak for themselves, but who gets the credit?
For eight years under President Obama, the growing burden of government suppressed the economic recovery that should have followed the recession of 2008-09. Mr. Obama nonetheless has claimed responsibility for today’s boom, asking Americans in September to “remember when this recovery started.” Yet it wasn’t until President Trump took office that the economy surged. His administration’s pro-business policies—cutting taxes, slashing regulations and encouraging energy production—released the pent-up dynamism of American capitalism. The result is a rising tide that is lifting boats across every class and region of the country.
The last recession officially ended in June 2009. During a typical recovery, the economy grows at a rate between 3% and 4%, and the Obama administration predicted such a surge in its 2010 midsession review. It never came. The “recovery” of those years often felt much like a recession. In the postrecession period under Mr. Obama, gross domestic product grew an average of 2.2%.
GDP growth staggered along at 1.5% in Mr. Obama’s final six full quarters in office. In contrast, growth doubled to 3% during Mr. Trump’s first six full quarters. And through three quarters of 2018, the economy has grown at a 3.3% clip and is on track to hit at least 3% for the full calendar year. That would make this year the first with 3% growth since 2005.
To get an even clearer picture, compare the contiguous periods of the Trump and Obama years. Accelerating growth is having an impact on the job market. By August of this year, Mr. Trump’s pro-business policies had driven job openings to their highest level since 2000, when the Bureau of Labor Statistics started tracking the number. With business optimism on a two year streak of record highs, the increase in job openings over Mr. Trump’s first 21 months has averaged an impressive 75,000 a month. Over Mr. Obama’s last 21 months in office, the number of job openings increased an average of 900 a month. That’s less than 1/80th of Mr. Trump’s average.
Even more impressively, the current surge in job openings has occurred while a record number of people are already employed. During Mr. Obama’s last 21 months, the number of employed Americans increased an average of 157,000 a month. Under Mr. Trump, the increase has accelerated to 214,000 a month, a 36% improvement. The number of employed people in October hit 157 million—the highest ever.
This increase in job openings and people employed has created increased demand for workers. In March the number of job openings exceeded the number of people the BLS considers unemployed for the first time since the bureau began reporting the data. There have been more openings than job seekers every month since. By September, there were one million more job openings than unemployed people.
Today’s jobs also offer more hours than in the recent past. In Mr. Obama’s last 21 months the economy added an average of 148,000 full-time workers a month. Under Mr. Trump that number has risen to 218,000, a 47% improvement.
The combination of more full-time workers with higher wages and more overtime opportunities has pushed up weekly earnings. In Mr. Obama’s final 21 months, weekly earnings rose an average of $1.31 a month. Under Mr. Trump, weekly earnings have increased an average of $1.84 cents a month: a 40% improvement that’s come mostly since tax reform took effect in January. Over that period, weekly earnings have grown an average of $2.31 a month, a 76% increase over Mr. Obama’s last 21 months. Maybe those tax cuts weren’t Armageddon after all.
A broad cross section of the country has benefited from the strengthening economy. The unemployment rate declined 13% during Mr. Obama’s last 21 months, but from there it has dropped another 23% during Mr. Trump’s tenure. Today unemployment rests at 3.7%, near a 50-year low. Since the government began reporting the data, unemployment has never been as low as it is today for African-Americans, Latinos, Asians and people with only a high-school education. The rate for women is at a 65-year low, and for teenagers, a 50-year low.
Despite Mr. Obama’s attempts to take credit, this is a Trump economic boom. Unleashed by Mr. Trump’s policies and powered by the initiative of American workers, the U.S. economy is creating prosperity for every class and color of people. Sorry, Mr. Obama, but you didn’t build that.
Mr. Puzder is a former CEO of CKE Restaurants and author of “The Capitalist Comeback: The Trump Boom and the Left’s Plot to Stop It.”