President Trump used his State of the Union address on Tuesday to tick off a laundry list of economic gains, citing record low unemployment for women, higher incomes for households and a “blue collar” boom that he said is underway across America.
The speech showcased what will be Mr. Trump’s primary message as he heads into a re-election campaign that he hopes will be a referendum on the United States economy. But it also overstated the strength of an economic expansion that has slowed or stalled for parts of his base.
“Jobs are booming. Incomes are soaring. Poverty is plummeting,” Mr. Trump said. “America’s fortunes are on the rise.” He added, “I am thrilled to report to you tonight that our economy is the best it has ever been.”
The economic expansion has now reached its 11th year, a record for the modern era of economic statistics in the United States. Unemployment sank to 3.5 percent in December, down from 4.7 percent when Mr. Trump took office. Workers’ wages are growing, particularly for those in the jobs that pay the least, like retail clerks and restaurant workers. The stock market, which is one of the president’s favorite gauges of economic success, is up about 20 percent from a year ago.
Forty percent of Americans say they are better off financially than they were at the same time last year — double the number who say they are worse off, according to a survey conducted last month for The New York Times by the online research firm SurveyMonkey. That is the brightest economic outlook respondents have expressed in the three years the survey has been conducted. Independent voters, a particularly crucial electoral bloc, reported a surge in confidence in the latest survey.
And yet the economy grew faster under several of Mr. Trump’s predecessors than it has on his watch. When he bragged of the economy’s strength on Tuesday, Mr. Trump frequently cited “record” low rates of unemployment and poverty, which are in part attributable to the low and falling rates he inherited from former President Barack Obama.
The economy’s improvement has also slowed on several fronts since last year, particularly in the president’s favored blue-collar sectors like mining and manufacturing.
Mr. Trump declared in his 2019 State of the Union speech that “an economic miracle is taking place in the United States, and the only thing that can stop it are foolish wars, politics or ridiculous partisan investigations.”
Over the last year, the president’s economic policies have not delivered anything close to the miracle he had promised to white working-class voters in the industrial Midwest. Combined employment in construction, manufacturing and mining grew more slowly last year than at almost any other point in the current expansion.
Job growth has slowed sharply — from 2.6 percent at the start of 2019 to 1.3 percent at the end of the year — in so-called middle-wage sectors that include mining, construction and transportation, according to calculations by Nick Bunker, an economist at the Indeed Hiring Lab. That blue-collar slowdown is driving the deceleration of job growth across the United States economy.
Mr. Trump’s policies have also not revived employment in coal mining, as he promised; the sector lost 1,000 jobs nationwide in 2019, according to the Labor Department. Primary metals manufacturing, which includes the steel and aluminum industries that Mr. Trump claimed to have restored with tariffs, shed about 12,000 jobs in 2019.
Employment growth in manufacturing, which Mr. Trump promoted in his speech last year, slowed to fewer than 50,000 jobs in 2019 — the worst rate of his presidency and the second worst of the long recovery from recession.
Mr. Trump nodded implicitly to that slowdown in his speech on Tuesday night. Last year, he claimed, incorrectly, that the United States had created 600,000 factory jobs during his tenure. On Tuesday, he revised that number down to “half a million,” which is the correct figure.
Many economists blame the economy’s deceleration on the trade wars Mr. Trump has waged with China and other countries that send steel, aluminum, washing machines and solar panels to the United States.
Economic growth slowed to 2.3 percent last year, according to data released last month by the Commerce Department. That is a percentage point less than what Mr. Trump’s advisers predicted for the year. Across Mr. Trump’s three years in office, growth has never reached the 3 percent rate that administration forecasters have projected. It has fallen well short of Mr. Trump’s campaign promises of 4, 5 or even 6 percent annual rates.
Independent economists expect only modest growth this year from the initial trade deal that Mr. Trump reached with China and the revamped North American trade pact that he signed last week.
Source: New York Times