Is a recession coming in 2020 or 2021? Experts continue to debate the conflicting signals, but an equally telling question might be: How does the “Trump economy” compare to Barack Obama’s?
President Trump constantly refers to the economy with descriptors such as “strong,” “terrific” and the “greatest in the history of our country,” but a closer look at the data shows a mixed picture in terms of whether the economy is any better than it was in Obama’s final years. The economy is growing at about the same pace as it did in Obama’s last years, and unemployment, while lower under Trump, has continued a trend that began in 2011.
The best case Trump can make for improvement since he took office is higher wages. The typical American worker’s pay is finally growing more than 3 percent a year, a level not seen since before the Great Recession. Similarly, consumer and business confidence surged after Trump’s election and has remained high, and manufacturing output (and jobs) also saw a noticeable jump in 2018 after Trump’s tax cut, although manufacturing is now struggling. There’s also been a drop in the number of Americans on food stamps.
But in other areas, Trump’s record does not look as rosy. Government debt and the trade deficit are climbing (while most economists don’t worry about the rising trade deficit, Trump made it a central part of his 2016 election campaign), and business investment is faltering as corporate leaders say they are wary of Trump’s trade war. The number of Americans lacking health insurance is also ticking up slightly.
As for two of Trump’s favorite metrics — stocks and jobs — there is a case to be made that those looked better under Obama, although most economists expected job gains to slow now that the economic recovery is a decade old.
Presidents have only so much control over the economy, but how voters perceive economic conditions and their personal finances can play a key role in how they vote. Lately, Republicans and many wealthy voters rate this economy as the best since the 1990s boom, while Democrats and many lower-income voters are less enthusiastic.
Here’s a look at the Trump economy vs. the Obama economy in 15 charts.
1. Job gains. The U.S. economy typically added more than 250,000 jobs each month in 2014 and 227,000 a month in 2015. Trump has not been able to top that yet, but experts say job growth remains surprisingly robust, especially given how many baby boomers are retiring and how many business owners complain they can’t find any more workers.
2. Unemployment rate. The nation’s unemployment rate is at a half-century low, a source of pride for Trump. But many economists have pointed out that the rate has been falling steadily since 2011, making it difficult to see much difference after Trump took office.
3. Growth. After a painful 2009, the economy has been growing for a decade. In the early years of the recovery, growth was lackluster, but it started to pick up in 2014 and 2015. Trump told America he could do even better as president, but his record so far looks similar to Obama’s final few years in office. While his tax cut and deregulatory push boosted growth in 2018, that appears to be fading as business owners grow concerned about the trade war.
4. Middle-class income. Most Americans saw a noticeable decline in their income during the Great Recession, and it took years for wages to recover. In 2017, a typical middle-class family finally saw their income climb above where it was in 1999. (Data for 2018 will be released in September.) Incomes have been rising steadily in recent years as more Americans get jobs.
5. Stock market. The Dow Jones industrial average was up 46 percent at this point in Obama’s presidency vs. 25 percent for Trump. Stocks soared under Obama, and he ended his White House tenure with one of the best gains of any president in modern history. Trump started out with a lot of love from Wall Street as well, especially with his tax cut, but stocks have moved sideways since he began his trade war.
6. Food stamps. About 1 out of 7 Americans received food stamps (the Supplemental Nutrition Assistance Program) in 2013 in the aftermath of the Great Recession, as people struggled to find good-paying jobs again. The numbers came down slightly under Obama, and the decline has accelerated under Trump as more Americans have obtained jobs and the requirements to remain on food stamps have tightened.
7. Manufacturing. Trump campaigned heavily on reviving blue-collar industries and jobs. While service-sector jobs in health care, technology and hospitality rebounded quickly after the Great Recession, manufacturing did not. Trump’s tax cuts helped boost manufacturing in 2018 (blue-collar job growth hit the fastest pace since the early 1980s), but the president’s tariffs have since taken a toll, sending manufacturing into a “technical recession” in 2019.
8. Home prices. The housing market was at the heart of the 2007-2008 financial crisis, and many Americans lost their homes or watched the value of their homes plummet. Home prices bounced back at the end of Obama’s term and have continued a steady climb under Trump.
9. Gas prices. Americans keep a close eye on gas prices and tend to get nervous when it climbs above $3 a gallon nationally, but for much of Obama’s second term and Trump’s first term, gas prices have remained under that key threshold.
10. Federal debt. The national debt swelled under Obama as the federal government spent money trying to rebuild the economy after the Great Recession. At the end of Obama’s term, the annual deficit had declined considerably, but it has since jumped up again under Trump because of his tax cut and increased government spending.
11. Wages. For much of Obama’s time in office, wages remained subdued, and his economic team cited lackluster wager gains as the “unfinished business” of his presidency. Under Trump, average hourly pay has climbed and is now growing more than 3 percent a year for the first time in more than a decade. There’s debate about how much credit Trump deserves for this, but his tax cuts and the jump in business optimism probably played a role. Concern is rising, however, that wage growth is stalling in 2019.
12. Consumer confidence. Confidence in the economy has jumped since Trump’s election. This is an area where there has been a clear break from Obama, although experts debate how much of a difference it has made. Normally when confidence rises, businesses and consumers spend more, but that hasn’t been the case, especially for businesses. Still, high confidence is probably playing a role in keeping the United States out of a recession, even as other parts of the world falter.
13. Trade deficit. The United States has purchased more from overseas than it has sold abroad for years, a situation known as a trade deficit. The trade deficit declined during the Great Recession but has since expanded, which is typically a sign that the U.S. economy is growing robustly. Trump campaigned on bringing the trade deficit down, but it has grown during his tenure.
14. Uninsured Americans. One of Obama’s key policy goals was to get more Americans health insurance. The number of people without health insurance fell noticeably during his tenure after the passage of the Affordable Care Act. Progress has since stalled under Trump, who attempted (unsuccessfully) to repeal Obamacare.
15. Business investment. Trump and his advisers said the goal of the GOP tax cuts was to encourage businesses to spend and invest more in new equipment and factories, which would then help boost the economy in years to come. While there was a slight bounce in business spending in early 2018, it has since plunged (even turning negative in the spring of 2019), largely because of the trade war.