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No, Donald Trump Has Not Made the Economy Great Again

Donald Trump is convinced that he has done wonders for the economy. The president is especially proud of the surging stock market, which he crowed about Friday morning on Twitter.

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But if you look beyond the frothy heights of the Dow and S&P 500, there’s little sign that Trump has accomplished much. Yes, he’s presiding over a gradual, fairly steady expansion left over from the Obama years. And he hasn’t tanked the economy, like some feared he might. But there’s little proof he’s done anything special to significantly boost it.

This isn’t a dig at Trump’s record, exactly. Aside from rare exceptions, like passing a massive stimulus bill in the middle of a recession, there typically isn’t much a president can do to dramatically alter the course of the economy on a year-to-year basisi. But it’s worth keeping in mind that Trump’s tenure has been fairly ho hum the next time someone claims he really is making the economy great again.

Start with the labor market. On Friday, the government reported that U.S. employers added 148,000 workers to their payrolls in December. That figure will be revised a couple of times. But for now, it’s a shrug-worthy number capping off an unremarkable year of job growth. Overall, the country added 171,000 new jobs a month in 2017, down from 187,000 in 2016 and 226,000 a month in 2015. It’s not as if things sped up towards the end of the year, either, as Trump settled into the White House.

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Some of this slight slowdown is to be expected. Unemployment is low, at 4.1 percent. And the closer the U.S. gets to full employment, the fewer jobs we need to create in order keep everyone who wants to work employed. The point is, there hasn’t been some sort of dramatic hiring surge under Trump. We’re just seeing more of the same.

Meanwhile, the tightening labor market still isn’t leading to much faster wage growth. Average hourly earnings for all workers rose 2.5 percent in 2017, compared to almost 2.9 percent in 2016. Once you take inflation (last recorded for November) into account, average pay has barely jumped at all.

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There are other signs of lingering softness in the labor market, too. The employment rate for workers between the ages of 25 and 54 is still a good deal below its pre-recession peak. It’s rising, but it seems like some Americans who should be working are still on the sidelines.

In short, job growth is trucking along unremarkably and wage growth has actually slowed at a time when we’re still digging our way out of the crater left behind by 2008. A golden era this is not.

What about the blue collar jobs Trump promised to bring back? On the one hand, the U.S. did add 71,000 more manufacturing jobs this year than last. But it added 62,000 fewer construction jobs. Does this have anything whatsoever to do with the president’s regulatory pruning and tax-cutting? Who knows. But it’s not exactly boom times for hard hats.

One thing some serious economic commentators have tried to give Trump credit for has been this year’s surge in business investment. Last week, Binyamin Appelbaum and Jim Tankersley of the New York Times reported that thanks to Trump’s light-touch on regulation, “a wave of optimism has swept over American business leaders, and it is beginning to translate into the sort of investment in new plants, equipment and factory upgrades that bolsters economic growth, spurs job creation — and may finally raise wages significantly.”

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This seems to be an overstatement at best. While it’s true that business investment has picked up the pace this year, much of that has been due to rising oil prices, which have led drillers to restart their rigs after shuttering them during the crude crash of 2015 and 2016. As economist Dean Baker notes, at least 43 percent of this year’s increase in business investment has come from the oil and gas industry—which the Bureau of Economic Analysis labels under the category “mining exploration, shafts, and wells.” Without all that oil drilling, investment has been good, but not necessarily something to write a sweeping article about. (Also, it’s worth noting that investment would have looked a lot strong under Obama if oil hadn’t been such a drag).

That brings us back to the Dow. While Trump surely isn’t responsible for every point that stock indexes have tacked on during his presidency—we’re in the middle of a long runup in global asset prices that’s been supported by loose central bank policies—I do think he probably deserves some credit. Corporations will be more profitable thanks to the massive tax cuts. Investors don’t have to worry about any big new regulations that might slow down business. It’s a recipe for high share prices.

With that said, it’s worth remembering that most stocks in the U.S. are owned by millionaires. The top 10 percent of Americans, with net-worths of $1.1 million or more, control almost 84 percent of household-owned stocks (that includes the mutual funds in retirement accounts like 401Ks). While there’s some evidence that Americans spend a bit more when stocks are up, which helps the real economy, the bull market is directly benefiting a relatively small, wealthy slice of the country.*

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Obviously, it’s a bit early to tell what the full effects of Trump’s economic policies have been. We don’t even have GDP data for all of 2017 yet. The big tax cut just passed, and might yield a bit more investment by businesses. But as of now, there’s just no sign that Trump has delivered any kind of dramatic change. Donald Trump inherited a pretty good economy. Unlike the rest of his presidency, he’s managed not to muck it up.

*Correction, Jan. 5, 2017: This post originally implied that the 84 percent of all stocks owned by the top 10 percent of U.S. households did not include retirement accounts such as 401Ks. The figure does in fact cover such pension accounts.

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