How has the US economy performed under Donald Trump so far?

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Trump's approval ratings are very poor, but how is the economy performing under his leadership?

Jobs

Trump has often tweeted about America’s growing job numbers, but is it true?

The Department of Numbers reports that in June 2017, an extra 220,000-245,000 jobs were added to the US economy, depending on which method of calculation is being used. The site shows that US employment has tended to increase each year since the crash at the end of the last decade during which the job rate declined.

Economic growth (GDP)

In the first quarter of 2017, the US economy grew by 1.4%, according to Trading Economics. This was down from the 2.5% increase in 2016’s fourth quarter and the 3.5% increase in the third. However, the 1.4% figure outranks the 0.8% the economy grew by in the equivalent quarter of 2016.

Inflation

Like in the UK, the US tries to get an inflation rate of 2%. According to the Federal Reserve, a 2% rate is seen as is “most consistent over the longer run with the Federal Reserve's mandate for price stability and maximum employment”. Put simply, there is a strong case that a 2% strikes a balance between the risks of high inflation and the dangers of low inflation or even deflation in the long-term.

According to Trading Economics, the inflation rate stood at 2.1%(in year-on-year terms) for Barack Obama’s final month in office. In January this jumped to 2.5%, then 2.7% in February. Since then it has fallen each month. In May, it stood at 1.9%, and in June it stood at 1.6%.

Barack Obama Speech

To put that into context, the inflation rate fluctuated from almost 6% to just below -2% during Barack Obama’s first term in office. The rate was more stable during his second term.


Analysis:

There is not necessarily a direct link between a president’s actions and economic indicators, but a strong economy likely factors into a president’s chances for re-election. Writing in the New York Times, election statistics guru Nate Silver calls the link between elections and unemployment rates a “maddeningly inexact relationship”.

Trump’s presidency is struggling in terms of its alleged scandals and its low approval ratings, but if there is one thing Trump can point to and call a success, it is America’s economy. It’s not an outstanding performance, but for now, it’s ticking along just fine.