To hear President Trump tell it in his State of the Union speech Tuesday, he rescued a declining, hollowed-out economy from ruin to create the greatest era of prosperity in U.S. history.
Trump has presided over a solid economy since taking office in 2017 but mischaracterized the state of the economy under President Obama and overstated his accomplishments. In truth, the economy has mounted a steady recovery since the Great Recession of 2007-09, marking the longest expansion in American history.
“You have seen a continuation of the trend,” says Elise Gould, senior economist at the left-leaning Economic Policy Institute.
Here’s a reality check of some of Trump’s assertions.
Trump: “The years of economic decay are over,” he said. “In just three short years, we have shattered the mentality of American decline.”
Facts: Obama spearheaded an economic stimulus and bailout of banks and other companies that are credited with digging the nation out of recession. The economy grew an average 2.2% a year during Obama’s tenure. That’s a bit less than the 2.5% average under Trump. But Trump spearheaded a $1.5 trillion our tax cut and spending increases to achieve that pace by juicing growth to near 3% in 2018. Growth is expected to slip below 2% the next two years.
Trump: “I am thrilled to report to you tonight that our economy is the best it has ever been.”
Facts: Not true. The economy grew well over 3% the mid-2000 and well over 4% from 1997-2000.
Trump: “Since my election, we have created seven million new jobs.”
Facts: The president is counting jobs created after he was elected but before he took office. About 6.7 million jobs have been added since his term began in late January 2017. But the Labor Department’s preliminary revision has tentatively lowered that figure by 501,000 to 6.2 million. A final total is scheduled to be released with the January employment report Friday.
By comparison, 8 million jobs were added in the final 35 months of President Obama’s term. Of course, with unemployment at a 50-year low of 3.5%, job gains have been expected to slow as businesses struggle to find available workers.
Trump: “Incredibly, the average unemployment rate under my Administration is lower than any administration in the history of our country.”
Facts: True, but that’s at least partly because unemployment was already low, at 4.7%, when he took office. The rate fell more sharply in the final 35 months under Obama, to 4.7% from 6.7%.
Trump: “Since my election, the net worth of the bottom half of wage earners has increased by 47% — three times faster than the increase for the top 1%.”
Facts: He’s correct, but the bottom half still has a tiny portion of household wealth – just 1.6%, up from 1.1% when Trump took office, Federal Reserve figures show.
Trump: “After decades of flat and falling incomes, wages are rising fast — and, wonderfully, they are rising fastest for low-income workers, who have seen a 16% pay increase since my election. This is a blue-collar boom.”
Facts: It’s difficult to fact-check this claim since Trump isn’t being specific about what he means by low-income workers. But other measures show low-income workers’ pay lagging. Workers in the 10th percentile of income saw average pay rise 5.8% last year, compared with a 6.9% gain for workers in the 90th percentile, Gould says.
Trump: “Real median household income is now at the highest level ever recorded!”
Facts: Inflation-adjusted median household income reached $63,179 in 2018, just a whisker below the all-time high of $63,476 in 1999, according to Gould and Census Bureau figures.
Trump: “Companies are not leaving; they are coming back.”
Facts: Nearly 500,000 manufacturing jobs have been created under Trump but employment stagnated last year amid Trump’s trade fight with China and sluggish growth overseas.
The U.S. trade deficit in goods increased 18% during the first two years of Trump’s administration, indicating that more manufacturing jobs left the U.S. than came back, says EPI Senior Economist Robert Scott.
Trump: “After losing 60,000 factories under the previous two administrations, America has now gained 12,000 new factories under my Administration.”
Facts: The latest Census Bureau data shows the U.S. lost 600 factories in 2017, Trump’s first year in office, Scott says. No public data is available for the last two years, he says.