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President Donald Trump has often touted the strength of the economy’s performance during his tenure. But critics often counter that the economic gains were at least as good as, if not better than, they were under his predecessor, Barack Obama.
Matthew Dowd, a former Republican consultant who now considers himself an independent and a critic of Trump, recently tweeted a statistical comparison along these lines, one that was later picked up on Facebook.
"So job growth and stock growth for the first two years of Trump are down from where they were (during the) last two years of Obama," Dowd tweeted on March 8. "The budget deficit, trade deficits and hate crimes are significantly up today from where they were when Obama left office."
But how about Dowd’s assertion that "job growth and stock growth for the first two years of Trump are down from where they were (during the) last two years of Obama"? There, he’s on shakier ground. (Dowd did not respond to inquiries.)
We looked at Bureau of Labor Statistics data for monthly increases in employment for a pair of two-year periods: Jan. 20, 2015, to Jan. 20, 2017, (Obama's final two years) and Jan. 20, 2017, to Jan. 20, 2019 (Trump's first two years).
Dowd is correct that Obama’s average monthly increase was higher, though not by very much — an increase of 210,291 jobs per month for Obama over that period, compared to an increase of 205,720 per month for Trump. That’s an edge of about 2 percent for Obama.
Digging a little deeper into the numbers, Jed Kolko, the chief economist for jobs site Indeed.com, noted that the average monthly employment increase declined from 2015 to 2016 to 2017. The surprise came in 2018, when the average monthly employment gain exceeded 2016 and 2017 levels.
"The tax cuts may have helped temporarily, along with a strong global economy," Kolko said, referring to the overhaul signed by Trump at the end of 2017. "Both under Obama and under Trump, job growth has far exceeded what's needed to keep up with growth in the labor force and the working-age population."
Ultimately, though, "the best characterization" of the job data between the end of the Obama years and the first years of Trump is "more of the same," said Steve Fazzari, an economist at Washington University in St. Louis.
For this part of Dowd’s tweet, we looked at two common measures of the stock market: the Dow Jones Industrial Average and the Standard & Poor’s 500. (As the graphs below indicate, the broad patterns were remarkably similar.)
On the stocks measurement, we found, Trump has the statistical edge over the same period of time we looked at for job growth.
The Dow was up by 24.6 percent under Trump, compared to 13.2 percent for Obama.
And for the S&P 500, Trump was up 17.6 percent, compared to 12.3 percent for Obama.
If you continue tallying the markets’ performance through today, the record under Trump only grows stronger — a 28.9 percent bump for the Dow since his inauguration, and a 22.9 percent increase for the S&P 500.
So on this metric, Dowd is wrong.
As we’ve noted, most recent presidents have seen significant stock market increases over their terms. Presidents Obama, Bill Clinton and Ronald Reagan, for instance, all oversaw three-digit percentage increases over their eight year terms. The one president who lost ground was President George W. Bush, whose final year in office coincided with the onset of the Great Recession.
Fazzari said he’s not surprised at the stock run-up under Trump.
"One clear benefit for stock prices in the Trump period is the big corporate tax cut," he said. "It’s not at all surprising that if you reduce taxes on corporate profits, stock prices will rise. The bigger question is whether the corporate tax cut has been more broadly successful for the economy. The results have been largely disappointing so far with stock buybacks rather than an investment boom and what now looks like it will be just a temporary and small bump to growth in the middle of last year."
It’s always important to note that a president doesn’t deserve either full credit for job gains on their watch (or full blame for job losses). Many other factors, from the state of the global economy to changes in technology, can have an impact.
It’s also worth noting that not every American is invested in the stock market, so it’s probably a less important economic metric than either jobs or the growth in gross domestic product.
Dowd tweeted, "Job growth and stock growth for the first two years of Trump are down from where they were (during the) last two years of Obama."
Dowd is right about job growth under the two presidents, though the difference between them is quite small. But he’s wrong about the stock market, which increased by a larger percentage during Trump’s first two years than in Obama’s final two.
We rate the statement Half True.
Matthew Dowd, tweet, March 8, 2019
Federal Reserve Bank of St. Louis, "All Employees: Total Nonfarm Payrolls," accessed March 13, 2019
Yahoo! Finance, historical Dow Jones Industrial Average data, accessed March 12, 2019
Yahoo! Finance, historical Standard & Poor’s 500 data, accessed March 12, 2019
Congressional Budget Office, "Revenues, Outlays, Deficits, Surpluses, and Debt Held by the Public Since 1969," accessed March 13, 2019
FBI, "FBI Releases 2017 Hate Crime Statistics," accessed March 13, 2019
Census Bureau, "Trade in Goods with World, Seasonally Adjusted," accessed March 13, 2019
PolitiFact, "Did tax law produce virtually no new business investment, as Joe Biden said?" Feb. 4, 2019
PolitiFact, "How Donald Trump, Barack Obama compare on the stock market," Jan 8, 2018
Email interview with Jed Kolko, chief economist for jobs site Indeed.com, March 13, 2019
Email interview with Steve Fazzari, economist at Washington University in St. Louis, March 12, 2019
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