Donald Trump's claim of having greatest ever US economy is false
Donald Trump's claim of having greatest ever US economy is false
(AFP) - Donald Trump said during the first US presidential debate with Joe Biden that his administration “built the greatest economy in history,” a statement he has often made to support his case for a second term in the White House.
The president’s record on the economy has been diminished by the devastating fallout of the coronavirus pandemic. Polls, however, tend to remain positive for him when voters are asked who they trust more to create jobs and economic growth.
This sentiment stems from Trump’s career as a businessman, an early tax cut he signed as president and a hitherto strong stock market, which -- on paper at least -- boosts retirement savings. Regardless, Trump’s messaging on the economy is prone to exaggeration and hyperbole.
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Did Trump create the ‘greatest economy?’
Gross domestic product and job numbers are the main measures of US economic health. Trump has touted both, as well as a chart-topping stock market, as proof of his success. But his claims are misleading.
In Trump’s favor, US unemployment hit a 50-year low of 3.5 percent in December 2019. In January this year, however, before states imposed lockdowns to try and contain the coronavirus, the Labor Department issued an update that was less positive; revised numbers showed job growth slowed significantly in the first three years of Trump’s presidency.
Some 6.5 million jobs were added between 2017 and 2019 -- 2.109m, 2.314m (in 2018, Trump’s best year) and 2.096m.
This compared to more than eight million jobs -- 3.004m, 2.72m and 2.345m -- in the three prior years, under Obama.
The pandemic has upended the job market.
Unemployment peaked at 14.7 percent in April 2020 -- almost seven million Americans filed for government help in one week of March alone. Millions of those lost jobs have since returned.
In August, the unemployment rate was 8.4 percent. The number of jobless people making new claims for benefits remains at a historic high -- 870,000 in the week that ended September 19 -- a sign that a patchy US economic recovery is losing steam.
Gross Domestic Product (GDP)
Growth measured by GDP has not set records under Trump. The best year of his presidency saw a three-percent rise in 2018, compared to 3.1 percent in 2015 under Obama. As recently as 2004 and 2005, under president George W. Bush, the economy grew 3.8 percent and 3.5 percent, respectively.
None of these three presidents have run close to reaching a historic high; the 1950s and 1960s saw years when growth was more than five percent annually.
The stock market
US stocks reached historic highs under Trump. When he entered office on January 20, 2017 the Dow Jones Industrial Average stood at 19,827.25 points. The index peaked on February 12, 2020, at 29,551.42 points. But as business confidence plunged with the pandemic the Dow Jones cratered and closed at 19,173.98 on March 20, 2020, ending the index’s worst week since 2008.
Much of that lost ground has been recovered. On September 29, the Dow closed at 27,452.66.
When percentage growth during Trump’s tenure is compared with Obama’s, however, a very different picture emerges.
Obama inherited a market in the depths of the global financial crisis. The Dow Jones was at 7,949.09 points. By the start of his second term in 2013 it had risen to 13,649.70. When he left office the index had more than doubled, registering cumulative growth of 148.3 percent.
In the 44 months of Trump’s first term the Dow Jones has grown 38.5 percent, in total.
