The media has, for the most part, underplayed an important news issue: the dramatic recovery of the U.S. economy in the first year of the Trump Administration. While individual statistical reports have grudgingly disclosed the welcome numbers, the overall impact of policies that promised (and recently delivered) lower taxes, decreased regulation, and the rejection of anti-energy production policies have been largely undiscussed.
From 2010—2016, the average GDP under Obama was about 2.12, including a dismal 1.9 in 2016. The fact is, the fiscal environment was getting worse, not better, as the impact of President Obama’s regulatory excesses, and his anti-energy policies became more deeply embedded. GDP never exceeded 3% annually, for the first time in the past seventy years. In sharp contrast since Trump’s election, according to the Bureau of Economic Analysis, “Real gross domestic product increased at an annual rate of 3.3 percent in the third quarter of 2017. In the second quarter, real GDP increased 3.1 percent.”
Even Americans outside of the job market suffered. While Obama dramatically increased spending on food stamp programs and assistance to illegal aliens, social security recipients during his administration received the lowest levels of cost of living increases since the Social Security cost of living system began.
In President Trump’s first year, MSN noted in January, “The economy has done something it has been unable to do since 2005: maintain 3 percent growth for three quarters in a row.” Forbes adds that, “Over the past year, the stock market has boomed, GDP growth has improved and unemployment is at an almost 17-year low.” Black unemployment has reached historic lows since President Trump took office. In the latest statistics released by the Bureau of Labor Statistics, 6.9% of black adults were unemployed in February. ZeroHedge’s Tyler Durden emphasized that total U.S. employee compensation rose in the fourth quarter to match the biggest 12-month gain since 2008, as private-sector pay picked up. Total compensation, which includes wages and benefits, rose 2.7% over the past 12 months, the highest since 2008.
The actual nature of the job creation story has been the most underplayed. The latest release from the Bureau of Labor Statistics (BLS) discloses that,
“Nonfarm payroll employment increased by 313,000 in February, and the unemployment rate was unchanged at 4.1 percent. Job gains occurred in construction, retail trade, professional and business services, manufacturing, financial activities, and mining. Incorporating revisions for December and January, which increased nonfarm payroll employment by 54,000, monthly job gains have averaged 242,000 over the past 3 months.”
While all of those increases are welcome, the manufacturing and mining hikes are the most notable. As noted by the BLS,
“Manufacturing employment grew by 31,000 in February. The industry has added 224,000 jobs over the past 12 months. In February, mining employment rose by 9,000, with most of the job gain occurring in support activities for mining (+7,000). Since a recent low point in October 2016, mining has added 69,000 jobs.”
Job creation under Obama was largely confined to low-income jobs with no benefits. Job creation under Trump, in contrast, has been in better paying, middle-class positions.
In a critique of the Obama Administration’s post-recession policies, Peter Ferrara, writing for The Hill, noted:
Historically, the worse the recession is, the stronger the recovery typically is. The economy grows faster than normal for a while to catch up to its long-term economic growth trendline… Based on that metric, the economy should have come out of the recession booming. But [during the Obama Administration that never] happened."
Frank Vernuccio serves as editor-in-chief of the New York Analysis of Policy and Government.