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U.S. Economy’s Dramatic Improvement

How has the economic outlook changed since the election?

For the bulk of the Obama presidency, a supportive media produced a consistent stream of highly questionable good news.  It was said that, following the ravages of the Great Recession, the unemployment numbers were improving.  Upon closer inspection, the truth was far, far less optimistic.  A combination of a historically dismal labor participation rate, along with the replacement of full-time, benefits-paying positions with low-paying, part time jobs providing no benefits artificially made it seem as though the labor market was doing better than it actually was. Median hourly pay rose only  7% over seven years. Those fortunate enough to actually have jobs received practically no wage increases.  It was said that inflation was low, but any trip to the supermarket contradicted that claim.  (It didn’t, however, prevent the Social Security Administration from using that as an excuse to deprive seniors of cost of living increases.) Taxes remained high, and health care premiums rose, making the squeeze on middle-income Americans dire. Non-housing debt increased.

Reuters reported in 2015 that “families in the middle fifth of the income scale now earn less and their net worth is lower than when Obama took office…the middle, the economy has shed positions – whether in traditional trades like machining or electrical work, white-collar jobs in human resources, or technical ones like computer operators.”

The decline of the middle class under Obama cannot be pinned on the Recession.  The poorly thought-out provisions of Obama’s Affordable Health Care Act (Obamacare) actually served to encourage employers to shed full time positions in favor of part time replacements. Key middle class jobs in the energy and defense sectors were quite openly attacked. The continuation of high tax rates and onerous regulations discouraged employment growth. While vast swaths of the economy were hit with interference from Washington, the explosive growth of tuition in colleges, institutions that were overtly supportive of the Obama Administration, were allowed to continue unaddressed. Regulations made many products too prohibitively expensive to manufacture in America, and were replaced by foreign made goods. According to the financial site Seeking Alpha “The homeownership rate in 2016 was the lowest in 50 years.”

With just ten months into the new Trump Administration, (and following  the effects of three deadly hurricanes) it may be too early to make any definitive statements on how the economy will change.  However, both significant policy changes as well as some early statistics indicate that a period of growth and, particularly for the middle class, improvement in economic fortunes, is occurring.
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In August, after the first complete fiscal quarter under the new White House, it was reported that economic growth reached 3%. CNN Money  has reported that in the The U.S. economy picked up steam during the second quarter…During the first full quarter with President Trump in charge, economic growth hit 3%, according to revised estimates released by the government on Wednesday.” This follows the reality that, during the entire 8 years of the Obama presidency, the U.S. economy never hit an annual growth rate of 3%, despite the expected “bounce” that generally follows a recession.

The Washington Times reports that “the U.S. economy is booming faster than any time since the late [1990s] It is undeniable. And the pace of improvement is quickening. In the last year of the Obama administration, the economy was decelerating with a dismal 1.6 percent growth rate. The economy revved up to a three percent growth rate in the April-June 2nd quarter this year…It’s easy to read too much into short term trends and, yes, they can turn on a dime. But the new bounce in the step of the economy is confirmed by many other indicators, almost all of which point straight north.The Dow Jones industrial average is up over 3,000 points (starting with the 700 point rally the day after the election) and the net wealth of Americans — mostly through their pension funds — has increased by more than $4 trillion.In August the University of Michigan, which tracks consumer sentiment, reported that confidence soared to near its highest level in at least a decade. Other surveys by the NFIB and the National Association of Manufacturers find that confidence for their members is hovering at near record highs.”

Adding to the optimism are reports that the U.S. economy has added over a million jobs in 2017.

Wayne Allen Root, writing for Townhall, reports that “The DOW has risen almost 25% since Election Day. That’s an increase of over 4,300 points in about 11 months. That’s the biggest increase in that period of time in the history of the stock market. The S&P 500 has passed $20 trillion in value for the first time in history. President Trump is also the only President in history to oversee two nine-day or longer stock rallies (where new highs are reached each day). Included in that record is the 12-day rally ending on February 28th– matching the all-time record set by President Reagan in 1987. Since the election of President Trump, the stock market has hit 63 closing highs, with 46 since Trump’s inauguration. On the other hand, Obama had exactly -0- stock market highs in his first four years in office. In total President Trump has added over $5 trillion to the U.S. economy since his election. GDP is hard evidence of how ‘mom and pop’ are doing on Main Street. Under Obama, America suffered the eight worst consecutive GDP years in history. Obama’s eight-year GDP average was 1.3%- the exact same GDP number as the period of the Great Depression. According to the Bureau of Economic Analysis, U.S. GDP has now been adjusted to a remarkable 3.1% growth in the second quarter (Trump’s first full quarter as president). That’s almost THREE TIMES HIGHER than Obama’s average GDP over his two terms. That grew our total U.S. GDP to almost $20 trillion- the highest GDP in history…According to the Bureau of Labor Household Survey, the number of employed Americans increased by an amazing 906,000 for the month of September. But that’s not even the highlight. Remember that almost every single job created in eight years under Obama was a crappy, low-wage, part-time job. Well under President Trump last month, full-time jobs (the kind we all want and need) increased by 935,000- the most in one month in the 21st century.”