By Mary Jones and Tony Bruce | Saturday, October 26, 2024 | 3 min read
President Trump frequently credits himself with building “the greatest economy” in U.S. history before the COVID-19 pandemic, a claim he uses as a central argument for re-election. However, the economic data tells a more complex story. Analysis of key economic indicators from Barack Obama’s second term compared to Trump’s first three years suggests that Trump’s economic successes largely continued trends that were already in motion when he took office.
Economic Growth: The GDP Story
Trump aimed to achieve annual economic growth exceeding 4%, viewing the sub-3% growth under Obama as a shortcoming. Yet, data show that average quarterly growth during Trump’s first three years was 2.5%, only marginally higher than the 2.4% in Obama’s second term. Trump’s ambitious growth goal remained unmet, while the steady, sustained growth that began in the Obama years continued. The consistency in these figures reflects a period of moderate growth rather than a new boom.
Employment and Unemployment Rates
When Trump took office, the unemployment rate stood at 4.7%, already near historic lows compared to previous decades. By December 2019, it had dropped to 3.5%, the lowest rate in half a century. However, the unemployment rate had been on a downward trend during Obama’s second term, which saw a more substantial drop—3.3 percentage points, compared to the 1.2-point decrease in Trump’s first three years. This suggests that Trump inherited a strong job market and maintained its trajectory, rather than sparking a new trend.
Job Creation: A Consistent Climb
Trump’s administration oversaw steady job creation, yet the pace was somewhat slower than during Obama’s second term. On average, the U.S. economy added 215,000 jobs per month during Obama’s final years, compared to 182,000 in Trump’s first three years. A consistent trend in job growth since the recovery from the 2008 recession reflects a sustained trajectory rather than an economic surge. Job creation remained solid but didn’t accelerate sharply under Trump’s policies.
Stock Market Surge
One area where Trump can claim a significant difference is the stock market. Following his election, the Dow Jones Industrial Average (DJIA) surged, reaching 28,538 by the end of 2019—a 56% increase from Election Day in 2016. By comparison, Obama’s second term saw a 38% rise in the DJIA, which reflects strong growth, but Trump’s achievement here is indeed notable. However, stock market performance doesn’t capture the full economic picture, particularly with other challenges like rising unemployment and projected GDP declines.
The Broader Economic Picture
The data underscores that while Trump oversaw certain economic strengths, especially in the stock market, his administration largely extended the positive momentum from the previous administration. Claims of a dramatic economic turnaround under Trump don’t hold up when key metrics are examined side by side. The numbers suggest he maintained and benefited from a steadily improving economy rather than fundamentally reshaping it.
As Trump seeks a second term, he won’t be tasked with “rebuilding” the pre-pandemic economy but rather navigating a new economic landscape reshaped by COVID-19. This will be a distinctly different challenge, requiring policies that address the unique pressures introduced by the pandemic. Whether his approach will be suited to this unprecedented task remains a question.
Copyright 2024 FN, NewsRoom.