President Trump begins his term with ambitious promises regarding the economy. He has pledged to boost economic growth to 4 percent a year and create 25 million jobs in the next decade as “the greatest jobs producer that God ever created.” He has promised to revive manufacturing, raise wages and make America great again.
Those gains, he has said, would come especially in the states that helped catapult him to a surprise victory in November.
“We focused very hard in those states and they really reciprocated. And those states are gonna have a lot of jobs and they’re gonna have a lot of security,” he said in a news conference earlier this month.
Voters in Rust Belt regions that have not shared as much in the nation's economic expansion will be looking in the coming years to see if Trump lives up to his promises. While Trump is sure to be judged on a wide range of economic metrics, here are a few metrics that will shed light on how he's doing in areas where he promised to deliver results.
Monthly manufacturing job growth
One of Trump’s biggest promises has been to restore the American manufacturing sector to its former glory. In his inaugural address, he vividly called out “rusted-out factories scattered like tombstones across the landscape of our nation.”
Economists caution that greatly increasing America’s manufacturing jobs will be hard. Factory jobs have disappeared not just due to free trade and globalization, but also automation, which has allowed American factories to make more with fewer employees than ever before. In fact, although manufacturing employment has fallen sharply in past decades, American factories now produce more than ever before.
The bottom line: To meet his goal of reviving American manufacturing jobs, look for Trump to beat President Barack Obama’s track record of adding roughly 10,000 new manufacturing jobs per month since the industry bottomed out after the financial crisis.
Job growth in the Rust Belt and beyond
Trump won the presidency in part because of his strength in the former industrial stronghold around the Great Lakes that is often called the Rust Belt. He won the swing states of Pennsylvania, Ohio, Michigan, Wisconsin and Iowa. He also flipped some counties that had voted for Obama in the previous two elections — perhaps because of his message of boosting the manufacturing sector resonated in areas that have seen good-paying manufacturing jobs disappear.
The bottom line: From 2010 to 2015, counties with greater than average manufacturing activity lost about 50 manufacturing jobs a year on average -- a total of roughly 430,000 jobs. By comparison, the nation added just shy of 900,000 net manufacturing jobs over this period, suggesting that counties with a heavy manufacturing presence did worse than counties without one when it came to adding manufacturing jobs. Look to see if some of these counties start to add manufacturing jobs under Trump. (We've excluded 2009 because of noisy data consisting of the collapse in jobs Obama inherited and then the effects of the stimulus and auto rescue leading to new jobs, and 2016 county-level data is not available yet.)
The employment-population ratio
During the campaign, Trump criticized Obama for creating an economy in which too many workers were left on the sidelines. While the unemployment rate fell to low levels by the end of the Obama administration, Trump and many of his followers pointed out that measure didn't fully capture the economic problem. That's because the U.S. government only counts people as “unemployed” if they do not have a job and are actively looking for work. Those who have become so discouraged with the job market that they have given up looking entirely are not counted among the unemployed.
However, the U.S. government does produce other data that capture this issue. One is the employment to population ratio for prime age workers, the percentage of the working-age population that is employed. While the ratio has improved a lot in the past few years, it still remains stubbornly lower than before the recession.
The bottom line: Watch to see if Trump's economy can pull more potential workers off the sidelines and into the workforce — a failing for which he often criticized former president Barack Obama.
Unemployment rates in the Rust Belt states
Trump hasn’t put much stock in the national unemployment rate before, but perhaps he will take a different attitude once his administration is in charge of it. That might be especially true for the regions known as the Rust Belt — especially the former manufacturing strongholds of Ohio, Pennsylvania, Michigan, Wisconsin and Indiana, where voter support was instrumental in Trump's election. Compared with the national average, the unemployment rate in those five states has been elevated — though it fell to 5 percent, in line with the average for the other 45 states, in 2015.
The bottom line: Economists say unemployment rates this low will be hard to beat, but watch for them to stay stable or fall below 5 percent in Rust Belt states under Trump. If the rolls temporarily swell because more discouraged workers start looking for jobs again and are counted among the unemployed, that could be a good thing, too.
Wages for the white male working class
In the 2016 election, Trump often pointed out that elites have done well in the economic recovery, but the average working class has lagged behind. His message about the loss of good-paying U.S. factory jobs seemed particularly tailored to white men, a group that he won by a wide margin. So one key sign of Trump delivering to his constituency in a way that could strengthen his case for reelection may be raising wages for white working-class men. While wages for white working men are already significantly above other working class demographic groups, they are far lower than white men with a college education.
The bottom line: During the last six years of the Obama administration, weekly median wages for white college-educated men grew by an average of $15 a year — outpacing white high-school educated men, whose wages grew by only $8.50 annually. Watch for Trump's economy to beat those gains.
The poverty level by race and ethnicity
Trump gathered a substantial following among the white working class, but he tried to appeal to other demographics, too. His overtures to minority groups often came in the form of promises to fix what he described as crime-ridden and impoverished inner cities — though he has been criticized for conflating African Americans with inner cities.
The bottom line: During the Obama years, the poverty rate fell fastest for Hispanics, shedding an average of 0.63 percentage points a year. Blacks also saw incremental gains, with the poverty rate falling by about a third of a percentage point per year. The improvement for white and Asians was smaller, however both these rates had way less far to fall. Look for Trump to improve on those measures.
Percent of the population that is uninsured
Insurance is also an economic issue; those left uninsured risk being faced with high medical bills that eat up savings and drive people into bankruptcy. The percent of the population that is uninsured fell across the U.S. in Obama's second term, as Obamacare required people to purchase insurance or face a penalty.
Trump has expressed a desire in establishing “insurance for all,” but the details of his plan remain unclear. On his first day in office, he signed an executive order directing federal agencies to waive any part of the plan that puts a financial or regulatory burden on Americans, which likely includes the requirement to obtain insurance.
The bottom line: In states that voted for Trump, the uninsured fell from 13.5 percent of the population in 2013 to 9.8 percent of the population in 2015 — still higher than the national average. (In states that voted for Obama, the drop was from 10.4 percent in 2013 to 6.8 percent in 2015.) Watch to see if the uninsured population starts to spike again under a Trump presidency.
U.S. trade deficit in goods with China and Mexico
The U.S. runs substantial trade deficits with both China and Mexico, huge manufacturing economies that make many of the finished products American consumers buy, and the inputs that U.S. factories use. Trump has often railed against this arrangement, saying that these countries are impoverishing and cheating U.S. workers. “The wealth of our middle class has been ripped from their homes and then redistributed across the entire world,” Trump said in his inaugural address.
Decreasing the U.S. trade deficit with these countries may be a tricky business. Trump has promised to boost the U.S. exporting industry and floated the idea of restrictions on imports, both of which could do the trick. But the U.S. dollar could also strengthen as a result of Trump’s domestic policies — a change that would make U.S. goods seem relatively expensive compared to foreign goods, and could increase the trade deficit. And the trade deficit can change for other reasons, like fluctuations in international investment.
Still, decreasing U.S. reliance on Chinese- and Mexican-made imports was one of Trump’s major promises, so this will be an area to watch.
The bottom line: Though a lot of factors are in play, watch to see if the U.S. trade deficit with China and Mexico falls if Trump really lessens U.S. reliance on imported goods.