- Wed Nov 30, 2016 10:24 am
President Obama's gift to Trump
November 29, 2016
The US economy grew 3.2% in the third quarter, according to newly revised government figures. That’s just three-tenths of a percentage point short of Donald Trump’s goal for growth, which is 3.5%.
Employers have created nearly 2.4 million jobs during the last 12 months. Donald Trump’s goal: 2.5 million new jobs per year. Again, we’re almost there.
Trump, the incoming president, campaigned on a litany of complaints about the economy’s performance under President Obama during the last 8 years. He repeatedly called the Obama economy “disastrous” and a “total failure.” Yet Trump now stands to inherit an economy that’s gathering steam and could make his first year or two in office a new standard for prosperity.
Trump supporters argue that recent economic news—almost all of it upbeat—is due largely to the fact that Trump won the presidential election and is now generating new hope about an economic revival. But it’s easy to break down the latest developments to determine which predate the election and which come after. The following updates were all published recently but refer to periods before the election, when most polls predicted Hillary Clinton would be the likely winner:
GDP. The latest figures, showing 3.2% annualized growth, are from the third quarter, which ended in September. Credit: Obama
Jobs. The latest 12-month number, 2.4 million new jobs created during the last year, is from October. Credit: Obama
Wages. A Glassdoor report shows that salaries are rising 3.1% per year, while inflation is just 1.6%. So while everybody wants more money, workers are getting ahead, on average. Glassdoor gathered the latest data in this series through Nov. 21, but it’s a three-month rolling average, so most of the data predates the election. Credit: Obama
Home prices. New figures show the S&P CoreLogic Case-Shiller home price index hit a new record high at the end of September, signaling that the housing bust that began in 2006 is officially over. There’s a catch: the homeownership rate has fallen significantly, and many first-time buyers find it difficult to afford a home or get approved for a mortgage. But the trends are improving. Credit: Obama
There have been a few encouraging developments since Trump got elected, too, showing some Americans do, in fact, feel emboldened by his victory:
Consumer confidence. It surged unexpectedly in the latest reading, which included survey results through Nov. 15, which was a week after Election Day. Consumer confidence is still well below previous highs, but is back to the the prerecession levels of 2007. Credit: Trump
Stocks. They’re up more than 3% since Election Day, with shares of financials and industrials up the most. Credit: Trump
It’s cheeky to credit any president for developments in the economy; elected officials have less control over jobs, profits, wages and prosperity than many people think. Nonetheless, presidents typically get credit for the economy when it performs well under their watch, and blame when it doesn’t. That helps explain the rise in Obama’s approval rating, which, at around 50%, is the highest since he got reelected in 2012. Trump will be lucky if he enjoys a similar rating four years from now.
Rick Newman is the author of four books, including Rebounders: How Winners Pivot from Setback to Success. Follow him on Twitter: @rickjnewman.