Trump's Economic Miracle: The Chartbook

Here's my sense of Trump's pre-pandemic economic record:

• he has maintained the economy he inherited in January 2017 from Obama
• I can't find a single instance of a negative Obama trend that was turned into a positive Trump trend

Growth Rate of Inflation-Adjusted Gross Domestic Product

Let's compare the Obama era, which began in the first quarter of 2009 and ended in the first quarter of 2017, which is when the Trump era began. Let's ignore the final two data points for the first two quarters of 2020 because they reflect the effects of the Covid-19 pandemic.

Do you see a Trump miracle? No? Well, neither do I.

Yes, the growth rate has been more stable in the pre-pandemic Trump era. Under Obama, there were some very bad quarters and some very good quarters. Under Trump the growth rate has been less variable, but in no way has there been a noticeable improvement.

(Note: All the charts on this page are interactive. If you move your cursor over a chart you will see the actual numbers plotted.)

Unemployment

Trump brags about the low unemployment rate during his presidency.

Once again, imagine a vertical line at the beginning of 2017 to mark the beginning of Trump's presidency and ignore the data points for 2020, which reflect the Covid-19 pandemic. The unemployment rate has clearly been low under Trump and it had decreased to record rates until the pandemic hit. But it is clear that the decrease in unemployment under Trump was a continuation of the eight-year trend under Obama.

Trump also brags about the record low unemployment rate among African Americans. But, before the pandemic hit, this too was a straight-forward continuation of the Obama recovery:

Manufacturing

Trump has often claimed that his trade and tax policies have worked wonders for U.S. manufacturing. Let's look at the data for the growth rate of inflation-adjusted output in the manufacturing sector.

Once again, Trump's record is hard to distinguish from Obama's (even if you ignore the data for 2020).

And here's the chart for employment in the manufacturing sector:

The gains in the pre-pandemic Trump era are a clear continuation of a long-established trend under Obama.

Mining

In the 2016 presidential campaign, especially in crucial swing states such as Pennsylvania and Ohio, Trump promised to revive the coal mining sector. So, what has been happening to employment in coal mining?

The big slide in employment under Obama has clearly been halted under Trump. So, this is a promise kept. But there has been no reversal of the Obama trend yet. (Of course, it is unclear whether an expansion of coal mining is even desirable. For those worried about climate change, the stalled decline in coal mining is not a good thing.)

Productivity

And as for all the bragging that Trump does about his deregulation, it should have improved business productivity, right?

Again, absolutely no sign of the Trump Miracle over the years 2017, 2018, and 2019. (Throughout this essay I am putting aside the data for 2020, because of the Covid-19 pandemic. The rapid productivity growth in the second quarter of 2020 is likely a reflection of the extreme withdrawal of labor from production; even ECO 101 students know about the phenomenon called diminishing marginal productivity. After the Black Death of the 14th century, productivity rose dramatically.)

Workers' Wages

Here's the data for the growth rate of inflation-adjusted weekly wages for those employed full time:

Again, there's nothing suggesting a dramatic improvement from the Obama era. (By the way, in case you are surprised by the massive growth in wages in the first two quarters of 2020, it is basically because most of those who lost their jobs during the Covid-19 pandemic were low-wage workers; the workers that held on to their jobs were mainly those who could do their work over the Internet from home.)

Investment

Trump's signature action regarding economic policy was to cut the corporate tax from 35 percent to 14 percent. He had argued that this would dramatically improve business investment spending. So, what has been happening to inflation-adjusted business investment (measured as a percentage of GDP)?

Nothing much. The big improvement was during the Obama recovery. That increase has not continued after 2017.

Trade Deficit

In his 2016 campaign, Trump had made a big deal about the U.S. trade deficit, picking fights with China, Canada, Mexico, Europe, etc., and using the trade deficit as his rhetorical cudgel. So, what has happened to the U.S. net exports (again, measured as a percentage of GDP) since Trump became president in January 2017?

I can't see any improvement. Can you?

(Net exports is exports minus imports. For the U.S., net exports has almost always been negative -- meaning that exports have been less than imports in dollar value -- ever since the 1970s. When a country's net exports has a negative (respectively, positive) value we say the country has a trade deficit (respectively, surplus). By the way, I don't care what happens to the trade deficit. I bring it up here only because Trump made such a big deal about it.)

The Government's Budget Deficit

I actually don't know if Trump has said anything about the U.S. federal government's budget deficit, which is the excess of the government's spending over its tax revenues. But Republicans routinely ignore it when Republicans are in power and magnify its supposed danger when Democrats are in power. So, what has happened to the budget deficit (as a percentage of GDP) since January 2017?

It fell quite sharply under Obama till 2015. The deficit widened thereafter and that widening has continued under Trump.

The Government's Debt

The amount borrowed by the government in any given period is the budget deficit that we just saw. The accumulation of such borrowing is called the debt. Again, Republicans ignore the national debt when they are in power and complain loudly about it when Democrats are in power. Here's what's been happening to the national debt (as a percentage of GDP) under Trump.

It is clear that Trump has made no dent in the national debt.

Inflation

Inflation is mainly under the control of the Federal Reserve, which is the central bank of the United States, and has little to do with who the president happens to be. Nevertheless, if you are curious:

Conclusion

To conclude where I began, Trump could be given credit for having kept the economy that he inherited in January 2017 from Obama in relatively good shape (at least before the pandemic hit). But I can't find a single instance of a negative Obama trend that has turned into a positive Trump trend. For the purposes of this essay, I have ignored 2020. But historians may see Trump's tragic and nightmarishly costly mishandling of the Covid-19 pandemic as part of his economic legacy. The economy will not come alive until the dying stops.