Associated Press
- Trump is making the strength of the economy central to his re-election bid.
- He has good reason to, given strong job growth, low unemployment and decent annual wage gains.
- “The economy is clearly an asset for him,” said one conservative economist.
- But the economy is also pricing out Americans in the middle class as inequality widens under Trump.
- Visit Business Insider’s homepage for more stories.
President Trump has thrust the economy toward the center of his re-election pitch — and key economic datapoints on the surface couldn’t be better for him.
The latest jobs report on Friday saw 225,000 payrolls added in January, a better-than-expected showing than economists forecasted and underscoring an economic expansion now in its 11th year.
The emerging portrait of the “Trump economy” leads to three indicators the president is likely to campaign on in 2020:
- A 3.5% unemployment rate, the lowest figure in almost 50 years.
- Robust jobs growth.
- A 3% annual increase in wages over the past year.
And Americans’ views on the economy are more positive now than they have been in decades. A Gallup poll released on Tuesday found the president had received the highest economic approval rating of any president in the past 20 years.
Douglas Holtz-Eakin, the president of the conservative American Action Forum and a former senior economist in the George W. Bush administration, said those figures represent a boon for Trump’s re-election odds.
“The economy is a clear asset for him,” Holtz-Eakin told Business Insider, noting strong job growth and a bump in wages are elements in the president’s campaign pitch that he believed would resonate among voters.
Steven Rattner, a former economic counselor to the Obama administration, recently said in The New York Times that Trump is benefiting from “the strongest tailwind of any incumbent running for re-election since 1900.”
The recent positive economic news could also make people less likely to support a progressive like Sen. Bernie Sanders, Holtz-Eakin said, as voters in swing states would be more likely to stick with Trump instead of supporting a Democratic presidential candidate vowing to push through sweeping reforms and rock the boat.
Still, headwinds remain as the economy still feels awful for a substantial portion of Americans — though it looks great on the surface, Business Insider’s Andy Kiersz reported. The cost of entering and staying in the middle class is rising, with the price tags of healthcare and education in the US climbing unabated.
While wage growth climbed 3% each year Trump has been in office, “real wages” — which factors into inflation — has increased only 0.8%.
Jared Bernstein, an economist and senior fellow at the left-leaning Center on Budget and Policy Priorities, recently argued in The Washington Post that Trump benefited from Obama’s management of the economy and misrepresented the extent of his influence over it.
“What makes Trump unusual is not that he’s riding favorable trends that predated him, nor that he’s claiming credit for them,” Bernstein wrote. “It’s that he lies about them, claiming that the economy was awful until he saved it.”
He also tweeted on Friday that manufacturing remains “a weak sector,” one that Trump had campaigned to rescue during the 2016 campaign. Manufacturers shed 12,000 jobs in January, the second month in a row of decline.
However, presidents don’t exercise full control of an unstable creature like the $20 trillion American economy. With Trump and his volatile style of leadership at the helm, little is certain, even the future direction of a booming economy.