WASHINGTON >> President Donald Trump is grossly overstating the extent of U.S. economic and job gains.
In a tweet today, he declares that the economy has “never been better” and jobs are at the “best point in history.”
Great financial numbers being announced on an almost daily basis. Economy has never been better, jobs at best point in history. Fixing our terrible Trade Deals is a priority-and going very well. Immigration on Merit Based System to take care of the companies coming back to U.S.A.
— Donald J. Trump (@realDonaldTrump) August 6, 2018
In fact, the economy and jobs are nowhere close to historic bests based on several measures. Economists have also warned that U.S. growth is largely fueled by government borrowing, as the federal deficit rises because of his tax cuts, and is thus unlikely to be sustainable after a few quarters.
A look at the claims:
TRUMP: “Great financial numbers being announced on an almost daily basis. Economy has never been better, jobs at best point in history.”
THE FACTS: He’s exaggerating. The economy is healthy now, but it has been in better shape at many times in the past.
Growth reached 4 percent at an annual rate in the second quarter, which Trump highlighted late last month with remarks at the White House. But it’s only the best in the past four years. So far, the economy is expanding at a modest rate compared with previous economic expansions. In the late 1990s, growth topped 4 percent for four straight years, from 1997 through 2000. And in the 1980s expansion, growth even reached 7.2 percent in 1984.
It’s not clear what Trump specifically means when he declares that jobs are at the “best point in history,” but based on several indicators, he’s off the mark.
The unemployment rate of 3.9 percent is not at the best point ever — it is actually near the lowest in 18 years. The all-time low came in 1953, when unemployment fell to 2.5 percent during the Korean War. And while economists have been surprised to see employers add 215,000 jobs a month this year, a healthy increase, employers in fact added jobs at a faster pace in 2014 and 2015. A greater percentage of Americans held jobs in 2000 than now.
Trump didn’t mention probably the most important measure of economic health for Americans — wages. While paychecks are slowly grinding higher, inflation is now canceling out the gains. Lifted by higher gasoline prices, consumer prices increased 2.9 percent in June from a year earlier, the most in six years.
Adjusting for inflation, hourly pay for non-managers — about 80 percent of the workforce — fell 0.2 percent over the same period. Yet in 1998, for example, inflation-adjusted hourly pay growth topped 2.5 percent.