Writing an objective performance review of the United States economy is not exactly easy, especially when it is in relation to a controversial president. Many things are happening, and every statistic and fact has a political angle.
My hope is to stay with concrete growth numbers and reputable measurements that offer less refutable conclusions of the health of the economy. I also wish to explore how economic patterns predict Trump’s future as a president. There is a strong connection between the executive branch and the United States economy.
The stock market seems to come up the most frequently in conversation. “The New York Times” predicted right before the presidential election last year that a Trump victory would result in a widespread sellout of stocks among investors. Since Nov. 9, the Dow Jones Industrial Average has risen 17 percent. The NASDAQ went up 18 percent, and the S&P 500 went up 13 percent. These indexes keep hitting all-time highs, so much so that people are becoming dulled to the news of it. It is not just wealthy investors who benefit from stock market growth. Businesses grow, and many people have 401-K’s that boost when the market booms. The stock market grew more in Trump’s first 100 days than in any presidency since 1989. The administration is not isolated from this success.
Investors have a new found confidence with deregulation of the financial industry, incentives for American industry renewal, and expected changes to the tax code. Even if you flat out hate the current administration, it is difficult to oppose a huge stock market win.
Critics believe a bear market is coming soon. Deregulation and potentially synthetic optimism of investors could quite possibly end this bull market with a dip. Not to mention the costs of leaving environmental regulations and sustainable development of industry out of the equation. The future costs for ignorance regarding biosphere health could be a fatal flaw we regret as a nation.
In regards to jobs, the situation is complex. Looking at just a few numbers it seems incredible. The unemployment rate is 4.3 percent, a 16-year low. Since Trump has taken office, one million jobs have been created and unemployment is down to its lowest levels since 2001.
Manufacturing jobs seem to be growing in industrial areas. According to the Philadelphia Fed. Index, essentially a measure of Northeast manufacturing, 51 percent of regional manufacturing firms increased activity in May, and one-third are predicting an expansion of their payrolls through the end of the year.
A foundational issue is that wage growth is not rising with job growth. Employers still do not feel pressure to offer big salaries to attract the workers they need, and that is not a positive indication. A low 2.5 percent increase of average hourly earnings over 12 months is not cause for celebration.
Trump seems to be succeeding at furthering the all-powerful American consumer culture. The Consumer Confidence index is showing positive trends. Consumer spending is up 2.8 percent, close to the administration’s 3 percent goals to keep the economy on a growth track.
Trade success of America is something Trump takes personally. He prides himself on making deals that provide American goods to other nations and provide profits to America. The trade deficit is not decreasing the way Trump planned long term. There was a significant low month in June, but it rose slightly in July. As a nation we are exporting more. America’s oil industry is experiencing a surge in response to deregulation. Increases in fracking and drilling has the United States exporting more and importing less. Exports to Canada and Mexico rose in June. Having positive trade with North American allies is essential. China, Trump’s sworn nemesis and favorite word, is enjoying an advantage. The United States trade deficit with China is up more than 6 percent this year. Trump wants the world to buy American, and China is not making it easy.
In regards to the future, Trump has a solid chance of being reelected in 2020. Arguments against this usually reflect in his low approval rating, but Trump was elected with a low rating. He had less than a 30 percent chance to even win. He does not have to be strongly liked or trusted. He just needs to impact the lives of Americans practically with a good economy. A recent Pew Research survey found that 58 percent of Americans believe the current economic situation is very or somewhat good, higher than the 44 percent of Americans who viewed the economy as good in 2016.
It would be unwise to mistake Trump’s actions as pure evil or ignorance. I personally abhor him and I do not see how people can find any attractive characteristics in his personality. He is no shining example of morality and Christian ethics by any means. But his policies that harm the environment and discourage welfare spending are not because he hates the outdoors or impoverished people.
He has always been a competitive businessman. He has an obsessive singular purpose to make America’s (economy) great again. Natural resource regulation and wilderness preservation do not make America rich. Giving handouts does not put money, jobs, or growth into the economy. The Trump Train is on a rigid linear path toward goals of wealth and power for the United States. It will not stop unless it finds something that will speed it up. It is ruthless, no doubt, but when it comes down to it, Americans (and humans throughout history) want jobs, security, and prosperity above all else, and our behavior shows it. Trump’s success and reelection chances critically depend on economic performance during his presidency, and based on what we have seen, it could go either way in 2020.