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Media Ignores Trump Economic Success

One of the most important news items, the virtual rebirth of the American economy under the Trump Administration, is also one of the most under-reported.

The reasons for that are political.  Obviously, it is a success for a White House that most of the media almost desperately attempted to prevent getting elected, and, once that effort failed, did everything possible to cripple. The magnitude of the Trump economic revival could be sufficient to get the President re-elected, an outcome that media seeks to prevent at all costs.

There is also an embarrassment factor, as key left-wing writers and politicians claimed Trump’s policies were incompetent or worse.  Just two examples: The New York Times’ Paul Krugman predicted that Trump’s policies would lead to a “Global recession, with no end in sight.”  Obama himself mocked Trump’s promise to revive manufacturing employment, stating that “those jobs aren’t coming back.”

Obama’s approach of extensive regulation at home and timidity in confronting China abroad provided poor results for American industry and related employment, continuing a downward spiral that could be traced back to the Clinton Administration. During the 2016 presidential campaign, Slate’s Jordan Weissman,  noted:  “Things have not worked out quite as the 42nd president hoped. Normalizing trade with China set our rival on a path to becoming the industrial powerhouse the world knows today, decimating American factory towns in the process and upending old assumptions about how trade effects the economy. Thanks to a growing body of academic research, we’re only just now beginning to understand the extent of the economic fallout…”

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In October, Forbes noted that “Comparing the last 21 months of the Obama administration with the first 21 months of Trump’s, shows that under Trump’s watch, more than 10 times the number of manufacturing jobs were added.”

The extraordinary rise of the U.S. economy is continuing. The U.S. Bureau of Economic Analysis reports that Real gross domestic product (GDP) increased at an annual rate of 3.2 percent in the first quarter of 2019. Current-dollar personal income increased $147.2 billion in the first quarter. Disposable personal income increased $116.0 billion, or 3.0 percent, in the first quarter. Personal saving was $1.11 trillion in the first quarter, compared with $1.07 trillion in the fourth quarter.”

According to the Bureau of Labor Statistics Total nonfarm payroll employment in March rose by 196,000 jobs (see figure), beating market expectations (175,000). The month of March continued the longest streak of growth on record (102 months). Job gains in February were revised up by 13,000, and January jobs were revised up by 1,000 for a cumulative increase of 14,000 jobs.

The White House notes that  “In total, the economy has added over 5.5 million jobs since President Donald J. Trump was elected. The March jobs report reflects a sharp rebound in job growth… Since the President was elected, job gains have surpassed 100,000 jobs in 26 of the 28 months. The average jobs growth in the past 12 months is a robust 211,000 jobs and jobs growth in the past 6 months has averaged 207,000 jobs. Both the 12-month and 6-month averages remain above the 2017 average of 179,000 jobs gained per month…Since the President’s election, the manufacturing industry has added 480,000 jobs and 209,000 jobs in the past 12 months. The report indicates that strong jobs growth is being coupled with wage growth. Nominal average hourly earnings rose by 3.2 percent over the past 12 months, marking the 8th straight month that that year-over-year wage gains were at or above 3 percent. Prior to 2018, nominal average hourly wage gains had not reached 3 percent since April 2009. Taking inflation into account, there is evidence that real wages are also growing. Based on the most recent Personal Consumption Expenditures (PCE) price index data from January, inflation in the past year was 1.4 percent, and based on the most recent Consumer Price Index (CPI-U) price data from February, the inflation in the past year was 1.5 percent.”

A particularly unique accomplishment: black and Latino unemployment is at an historic, all-time low.

Great news, all around. Just don’t expect to read much about it in the media.

Chart: White House graphic

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Ignoring Good News About America’s Economy

In the aftermath of the election of 2016, America’s economy has made a significant comeback following a decade of recession and poor decision making in Washington.  But you wouldn’t notice it from major news media reports.

Part of the problem established by the media’s replacement of objective coverage of the news with editorial opinion is that significant information simply does not get reported, outside of specialty publications and sources that happen to favor the political interests that gain from a particular piece of information.

Currently, many general media sources are ignoring or downplaying the national economic revival.

The Congressional Budget office (CBO)  has reported that real GDP growth is relatively strong this year and next, as recent changes in fiscal policy add to existing momentum. Productivity growth, after the ravages of the recession and the Obama economy,  are returning to nearly average over the past 25 years.  The Trump Administration’s changes in fiscal policy have boosted incentives to work, save, and invest. CBO also estimates  that receipts for the first seven months of fiscal year 2018 totaled $2,012 billion, a figure which is $83 billion more than the amount during the same period last year. That is somewhat surprising. Receipts collected in April, for example, were $30 billion to $40 billion larger than CBO expected.

The good news is, according to CBO, mostly related to economic activity in 2017 and may reflect stronger-than-expected income growth in that year.

Economic and business publications, unlike the general media, have noticed. Forbes notes that  “A strong job market will likely lead to higher consumer spending in the summer months as employment and incomes keep growing. Inflation isn’t expected to be as volatile. HSBC estimates 1.9%, or thereabouts, for the foreseeable future.”

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These aren’t abstract figures that are merely statistics good for Wall Street while not helpful to Main Street, a problem that was prevalent during the Obama Administration.  Middle class employment is finally rising. The latest Bureau of Labor Statistics  monthly report disclosed that Total nonfarm payroll employment increased by 164,000 in April, and the unemployment rate edged down to 3.9 percent. More important than the overall statistic was the type of jobs that were increasing. Job gains occurred in professional and business services, manufacturing, and mining, solid middle class occupations which had been declining over the past decade as a result of poor policy decisions. BLS found that “In April, employment in professional and business services increased by 54,000. Over the past 12 months, the industry has added 518,000 jobs. Employment in manufacturing increased by 24,000 in April…Manufacturing employment

has risen by 245,000 over the year…In April, employment in mining increased by 8,000…Since a recent low in October 2016,employment in mining has risen by 86,000.

BLS also found that  the median weekly earnings of wage and salary workers in the first quarter of 2018 Median weekly earnings of the nation’s 113.4 million full-time wage and salary workers was 1.8 percent higher than a year earlier.

In a statistic that may prove somewhat disruptive for Democrats in the upcoming midterm elections, who heavily depend on black and Latino support, the Trump Administration’s economic policies have been particularly helpful to both those communities.  The unemployment rate for black workers dropped to 6.6 percent, beating the previous record low of 6.8 percent set in December. Similarly, Hispanics had an historic low  unemployment rate of 4.8%, matched once before in 2006.

Photo: U.S. Department of Labor