US President Donald Trump has been in office for more than 500 days, and his Administration has gone to great lengths to persuade the American people that the economy is in good hands.
When Donald Trump was sworn in as the 45th President of the United States on January 20, 2017, he promised to “make America great again”. The main sentiment behind this statement was that the economic welfare of American citizens was about to improve. So, some 18 months after taking office, how is the economy looking? President Trump, with his customary modesty, recently tweeted, “In many ways, this is the greatest economy in the history of America”.
Well, the stock market is certainly looking healthy. When Trump took office, the Dow Jones Industrial Average (DJIA) was sitting at 20,093. It is now at 24,932, after reaching a recent all-time high of 26,616 before pulling back to the current level. While a rise of almost 5,000 points may look impressive, former President Barak Obama also posted good stock market gains during his early days in office, with the DJIA rising from 8,000 points to 12,400 after his own first 500 days, so perhaps the stock index is not the best performance indicator for a president. Still, a rise of 5,000 points is better than a fall of the same degree.
Then there are the employment figures. It is true, many more jobs have been created since Trump’s accession to the presidency, with the unemployment rate falling from 4.3% to 3.8%, the lowest level for the past 18 years. This is certainly something that Obama didn’t achieve. But, when looking at statistics, it is always important to realize that there are absolute levels, fall/climb direction, and the rate of change to consider. It does indeed appear that the economy is in a healthy situation, with economic statistics improving across the board. Gross Domestic Product, adjusted for inflation is the highest on record, although that is most probably due to improvements in technology and business efficiency.
With jobs up, output up, and incomes on the rise, it would take a real cynic to claim that Trump’s first 500 days have been an economic disaster. However, there is another side to every story. Trump’s opponents point out that he stepped into Obama’s shoes with an improving economy well underway. Trump was just “lucky” and took hold of the reins as the horse picked up speed. For example, in Obama’s last year in office, he recorded an average of 195,000 new jobs per month. Trump has not been able to match that, only managing to reach 190,000 per month. Add to this that while the economy is picking up, the rate of change is still erratic, which could predict a downturn at any time. While President Trump certainly deserves credit for continuing to steer the Good Ship USA in the right direction, it is probably too early to say whether he will ultimately deliver on his economic promises. And with the current trade war brewing between the US and China, not to mention a similar conflict between the US and her European allies, then it’s clear that anything is possible with this unpredictable president.