WASHINGTON — Americans are enjoying the best economy “EVER,” says President Donald Trump, with trademark hyperbole.
Trump’s tendency to take good economic news and wildly exaggerate it is on display in tweets self-celebrating 500 days in office.
His boast of record achievements on the economy and jobs ignores the Roaring Twenties, the war-time boom in the 1940s, the 1990s expansion and other times when unemployment was lower than now, economic growth was higher than now, or brisk productivity made the U.S. the world’s economic powerhouse.
TRUMP: “This is my 500th. Day in Office and we have accomplished a lot – many believe more than any President in his first 500 days. Massive Tax & Regulation Cuts, Military & Vets, Lower Crime & Illegal Immigration, Stronger Borders, Judgeships, Best Economy & Jobs EVER, and much more.” — tweet Monday.
THE FACTS: Although he is crowing first and foremost about the 3.8 percent unemployment rate in May, plenty of economic challenges remain: Inequality is a problem, housing costs are jumping, many baby boomers lack sufficient retirement savings and student debt is restricting the choices of recent college graduates. Overall economic growth has yet to show it can sustain growth in excess of 3 percent as Trump has promised.
Economists generally describe the U.S. economy as healthy for the moment, but they’re naturally cautious about claiming that it’s without weaknesses.
An economy this large and diverse has a way of thwarting any hubris. What looks phenomenal at one moment can be the source of a downfall later. The happy days of the 1920s gave way to the Great Depression, the tech boom led to a burst bubble and the surge in home ownership in the mid-2000s led to a devastating crash.
The job market is certainly strong, with unemployment at an 18-year low. If it drops another tenth of a point, it’ll be the lowest since 1969. Yet the jobless rate was at or below 4 percent for four straight years back then, from 1966 through 1969, and wages were rising more quickly. The cost of items such as college and health care was much lower then.
As for growth, in the 1990s boom, still the longest on record, the U.S. economy expanded at an average annual pace of 4.3 percent for five years, from 1996 through 2000. In the 1980s, growth averaged 4.6 percent annually from 1983 through 1987. While the economy has picked up from 2016, its best showing since Trump took office was 3.2 percent in last year’s third quarter.
And in the late 1990s, a greater proportion of Americans had jobs than they do now. In May, 79.2 percent of people in their prime working years — aged 25 through 54 — were working. That’s down from a record high of 81.9 percent in April 2000, or about 3.4 million fewer people with jobs. The unemployment rate has fallen as far as it has partly because many Americans have given up looking for work. In the 2016 campaign, Trump used to cite that trend as evidence that the unemployment rate under President Barack Obama was a “hoax.”
The lowest unemployment rate since World War II was reached in 1953, when it averaged 2.9 percent, almost a full point lower than today.
