Four years ago, Trump described an economy in dire straits — soaring unemployment rates, a negative GDP, disappearing manufacturing jobs, a stock market hurtling toward a crash. According to the president, all of those negative economic trends were reversed — once he was elected. Now, he holds up the economy as “the envy of the world.”
Regular readers of The Fact Checker know we automatically award Two Pinocchios for claims that any president alone deserves credit for economic improvements. That’s because the U.S. economy is complex, and the decisions of companies and consumers often loom larger than the acts of government. It hasn’t curbed the president’s hype.
So what’s going on? We’ve previously examined how the economy under Trump stacked up to the economy under President Barack Obama, but let’s compare some economic claims that appeared in Trump’s campaign announcements from four years ago and this week.
2015: “And our real unemployment is anywhere from 18 to 20 percent. Don’t believe the 5.6. Don’t believe it.”
2019: “The unemployment rate is the lowest rate it’s been in over 51 years. Think of that. And as I said before about African-American, I now say also about Hispanic-American and Asian-American, unemployment, have reached the lowest rate in the history of our country, unemployment."
The president is still bumbling unemployment statistics. In May 2015, the unemployment rate was 5.6 percent. But Trump often pointed to people who had given up looking for work to claim the unemployment rate was flawed. A subset of the unemployment rate, the U6 rate, which takes into account people who stopped looking for jobs, had fallen from a peak of 17.1 percent in October 2009 to 10.8 percent when Trump spoke. The Fact Checker found Trump’s estimate of 18 to 20 percent to be flat-out false.
These days, the president readily claims credit for the low unemployment rate and ropes in a variety of claims about the jobless rates for minorities. In May 2019, the unemployment rate was 3.6 percent, which is the lowest rate since December 1969. Trump earned Three Pinocchios for his claims about the African American unemployment statistic. It reached a low of 5.9 percent in May 2018, but rose to 6.7 percent in April. This metric has been in existence for less than 50 years. An older set of government data suggests black unemployment went much lower in the 1950s. The Asian-American statistic has been around for less than 20 years. And while it reached a low of 2 percent in May 2018, it rose to 3 percent in March, the most recent month for which data are available.
That said, the unemployment rate has declined at a faster pace than the Congressional Budget Office predicted at the beginning of Trump’s term, but the unemployment rate had already stabilized. It was ranging between 4.6 and 5 percent starting in August 2015.
2015: “I’ll bring back our jobs from China, from Mexico, from Japan, from so many places. I’ll bring back our jobs, and I’ll bring back our money…We need a leader that can bring back our jobs, can bring back our manufacturing.”
2019: "In the eight years before I took office, on average we lost 2,000 manufacturing jobs a month. Since my inauguration we’ve added 16,000 manufacturing jobs a month -- that didn’t happen by accident. “
While running for election, Trump regularly promised to revive a struggling manufacturing sector by “bringing back” jobs. The U.S. gained a slim number of manufacturing jobs per month on average in the eight years before Trump took office in large part because of the recession. That doesn’t mean there wasn’t growth. Manufacturing jobs started to increase steadily in April 2010 — more than five years before Trump announced he was running for president.
That steady rate of growth has continued and accelerated under Trump. On average, the economy has gained more than 13,000 new manufacturing jobs — not 16,000— per month since Trump took office.
2015: “Last quarter, it was just announced our gross domestic product — a sign of strength, right? But not for us. It was below zero. Whoever heard of this? It’s never below zero.”
2019: “Our economy is the envy of the world, perhaps the greatest economy we have had in the history of our country.”
GDP shrinks during a recession, and there have been more than a few during Trump's lifetime, so there was no basis for the claim that GDP growth never goes below zero.
Because of several big revisions in the estimates, Trump’s claims have lost all their bite with time. An initial estimate from the Bureau of Economic Analysis showed the rate of GDP growth declined from 2.2 percent in the fourth quarter of 2014 to 0.2 percent in the first quarter of 2015.
But then the Commerce Department revised the first quarter estimate to -0.7 percent, signaling an economic contraction. At the time Trump announced his candidacy in 2015, that was the working estimate.
The rate has since been revised. It is now reported in BEA data as 3.3 percent for the first quarter of 2015.
Still, the president can certainly brag about the state of the economy, but he runs into trouble when he makes a play for the history books. While jobless claims and the unemployment rate are low, economic historians point out the labor force participation rate, business labor productivity, wages and the GDP aren’t growing at the same rate they may have in the past. They noted the economy today is not doing as well as it did under Presidents Dwight D. Eisenhower, Lyndon B. Johnson or Bill Clinton — or Ulysses S. Grant. We’ve previously awarded Trump a Bottomless Pinocchio for this claim.
2015: “We have a stock market that, frankly, has been good to me, but I still hate to see what’s happening. We have a stock market that is so bloated. Be careful of a bubble because what you’ve seen in the past might be small potatoes compared to what happens. So be very, very careful.”
2019: “But you know, today we had a massive day on the stock market. A lot of good things are happening, but we had a very big day and we’re very close to I think our 68th record. You know, we’ve hit all-time records, just tremendous; I think it’s actually more than that, but it’s a lot.”
In 2015, Trump cautioned that the stock market gains seemed suspect and could signal a market bubble. Now, he claims credit for the rising stock market. What’s going on here?
During the recession, the Dow Jones industrial average fell to a market low of 6,443 on March 6, 2009, early in President Barack Obama’s first term. It stood at 19,827 when Trump took the oath of office. So there was already a substantial gain when Trump became president — what he used to deride as a bubble.
Still, Trump regularly cites data from the Dow Jones industrial average, a collection of 30 U.S. “blue chip” companies. But the Standards & Poor’s 500 stock index provides a more nuanced data set. It has grown roughly 5 percent faster than Japan’s Nikkei 225 index for the largest percentage of overall growth, while the German and British markets declined. As of a year ago, the Japanese and German markets had kept pace with the United States, but in recent months, the U.S. stock market has posted gains that have put it ahead.
The president has never explained his flipped position and we’ve previously awarded him an Upside-Down Pinocchio for his seemingly self-serving representation of the market.
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