During President Barack Obama’s last 19 months in office, the economy added an average of 208,000 jobs a month; during President Trump’s first 19 months in office, it’s added an average of 189,000 jobs a month.
During Obama’s last 19 months, the share of 25- to-54-year olds who have a job rose 1.1 percentage points; during Trump’s first 19 months, it rose 0.9 percentage points.
During Obama’s last 19 months, wage growth went up 0.3 percentage points; during Trump’s first 19 months, wage growth went up 0.2 percentage points.
These are the facts the Trump administration seems to think it can transform into evidence that it’s made the recovery better than it was before. Now, if this doesn’t quite make sense to you, don’t worry. It just means that you know which numbers are bigger. The simple story is that the labor market recovery hasn’t sped up under Trump. At the same time, though, it hasn’t slowed down, either. Which is to say that things have pretty much been the same as before.
That’s not exactly the most inspiring political slogan, and so the Trump White House’s holy grail has been trying to figure out how to make a straight line — such as prime working age employment growth — look crooked.
Now, to be fair, a few numbers actually have gone up more under Trump. Consumer confidence has increased a lot, and, to a lesser extent, so has business investment. The problem is that neither of those indicator reports tells us very much. Consumer confidence, for example, has evolved into the economic equivalent of a political poll: Republicans say things are better when a Republican is in the White House, and Democrats vice versa. So it almost tells us more about how people intend to vote rather than how they intend to spend.
The nonresidential investment numbers are similarly unimpressive when you put them in their proper context. The Trump administration likes to say investment has gone up because of the magic of the Republicans' big corporate tax cuts. But the reality is a lot more mundane: It’s oil.
Drilling, you see, makes up a big part of business investment, so it should be no surprise that it flatlined after oil prices collapsed in 2014 and then rebounded after prices went up in 2016. It’s possible the tax cuts will eventually increase investment, but they haven’t so far. The extra cash has mostly been used for more stock buybacks instead. It’s too soon to tell if that will change.
Which brings us to the best argument that Trump could make about his administration’s effect on the economy: that all the fiscal stimulus he’s thrown into it has kept job growth from slowing down and, for a few quarters at least, made GDP growth speed up. The idea is that we’d expect growth to be lower when unemployment is down because there aren’t as many people left to put back to work. But that hasn’t been the case so far, and Trump’s big $1.5 trillion tax cut probably deserves some of the credit — just not for the reason that the administration wants us to believe.
What’s happened so far is that the tax cuts have boosted the economy in the short term by giving wealthy shareholders more money, but there’s little evidence they’ve boosted growth in the long-term, like the administration said they would, by giving companies more incentives to invest.
If those investments never materialize, then this will have been a one-off increase in growth, just a poorly designed stimulus that shoved more money into the pockets of the people least likely to spend it.
Instead of admitting that, though, the Trump administration is playing games with numbers. Its favorite tricks are to measure things from the day Trump was elected (while Obama was still in office) and to show 1½-year averages instead of monthly numbers — even for things that aren’t very volatile, such as prime-age employment. The result, as you can see below from the Council of Economic Advisers' latest report, is almost enough to make a trend that hasn’t changed look like it might actually have changed — ever so slightly, if you squint or, even better, have bad eyesight.
This is apparently what the White House considers the most accurate way to show numbers that, as we said before, went up 1.1 percentage points in Obama’s last 19 months in office and 0.9 percentage points in Trump’s first 19 months. The claim is no less embarrassing than the victory lap Trump made when he declared that GDP growth is higher than the unemployment rate “for the first time in over 100 years” — when the truth is that it’s the first time in 12 years.
The only difference is this is slightly more subtle than Trump’s rather outlandish claim — and not being broadcast to nearly as many Twitter followers.