The Trump economy, three years in: What the numbers say

Donald Trump has been president for a little over three years. With that track record, how is the "Trump economy" doing?

Did Trump dramatically change economic trends, or did he merely continue existing trends from the Obama administration?

FOX Business ran the numbers, comparing basic economic performance measures for the same number of days before and after Trump's election.

Here's how trends have changed:

Stock market

The graph shows that the stock market grew 31 percent in the 807 trading days before Trump's election, but it grew by 56 percent in the 807 trading days after it, up through the third anniversary of Trump's inauguration.

In the graph above, the blue line shows the trend prior to Trump's election, and the red lines since then.

More than half of Americans invest in the stock market, either directly or through 401(k)s and other retirement funds.

Through February, the stock market continues to bump up against fresh highs with the month on track to be one of the strongest by historical standards.

AT DAVOS, KUDLOW TOUTS HUGE WAGE GAINS AMONG BLUE-COLLAR WORKERS

Some economists say the gains show tax cuts and freer markets are working.

"The administration policies on tax cuts and deregulation have been good for both Wall Street and Main Street," economist David Henderson, who served on President Ronald Reagan's Council of Economic Advisers, told FOX Business. He said the big improvement came even despite an expensive trade war.

The outcome is also a far cry what some had predicted. After Trump's election, Nobel-prize-winning economist Paul Krugman predicted: "We are very probably looking at a global recession, with no end in sight."

But a former Obama economic advisor says there are less rosy trends outside the stock market.

"It has really been a tale of two economies lately. Consumer related things have been strong. But anything relating to business investment or manufacturing or trade has been quite tough," economist Austan Goolsbee, who advised President Obama's campaign and chaired Obama's Council of Economic Advisers, told FOX Business. "Manufacturing has literally been in recession. Part of that has come from the damage from the tariffs. Another part has been that the tax cuts did not seem to generate anything close to the kind of sustained improvement that was promised."

Manufacturing

Manufacturing fell 1.2 percent during two quarters in the middle of 2019, before recovering partly in the latest reported quarter. Goolsbee said that qualifies as a recession over the last six months.

But overall, manufacturing has risen under the Trump administration, and it has done so faster than before he was president.

Manufacturing rose 3.6 percent during Trump's three years, which was more than double the rise of 1.7 percent in the three years under Obama before that, according to government data.

Manufacturing employment also rose under Trump, with 487,000 manufacturing jobs created.

In contrast, in the three years prior to Trump's term, manufacturing employment rose by 287,000 jobs.

Asked about the difference, Goolsbee pointed to the Purchasing Managers' Index – a survey of senior executives at manufacturing companies that asks about their new orders and inventory levels. The index is currently low, hinting that the near future of manufacturing might be bleak.

Unemployment

Unemployment fell under Trump, but it was already falling at a rapid pace before he came to office:

Economists say that the continued decline is particularly impressive since the rate is nearing record lows. The current rate is lowest it has been in the last 50 years.

"We are approaching ... record low unemployment rates and once one gets so close to zero, it cannot continue to fall at the rates that it [used to]," Ed Stringham, President of the American Institute for Economic Research, told FOX Business.

Former Trump advisors also note that after Trump came to office, government estimates had to be dramatically revised in a positive direction to match the new reality.

"Before Mr. Trump took office in January 2017, the Congressional Budget Office forecast the creation of only two million jobs by this point. The economy has in fact created seven million jobs," wrote former Trump chief economic advisor Gary Cohn and former Trump chair of the Council of Economic Advisers Kevin Hassett in a Wall Street Journal article.

Further, when President Trump took office: "the Federal Reserve's median forecast had the unemployment rate inching up toward 5 percent, almost 1.5 percentage points higher than the current 50-year low."

Wages

Workers' wages rose under Trump, but had been rising slightly faster prior to Trump's term:

"I think that is at least partially explained from the economy leaving a very bad place in the early 2010s," Stringham said.

Stringham attributes the improvement under the Obama administration to the phasing out of government programs like the bailouts and government stimulus.

"As the government started easing off the more socialistic policies, that was good ... and helps explain much of the recovery," he said.

Slow-growing wages are a common critique of the administration.

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"Trump's 'Great' Economy Is Failing Workers," a New York Magazine article argues.

But wages are at their highest point ever. Cohn and Hassett also note that lowest-income workers have seen the biggest raises this year.

"Over the past year, nominal wages for the lowest 10 percent of American workers jumped 7 percent. The growth rate for those without a high-school diploma was 9 percent," they wrote.

Stringham says the credit for achieving new economic highs – and for massive stock market growth – goes to the president's policies.

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"The president promised and delivered on two major economic policies that have been very good for markets. Number one is the tax cuts and lowering of corporate tax rates. That encourages more investment in the American economy," he said.

"Perhaps more importantly ... eliminating harmful economic regulations has clearly been good for American business and markets in general," he added.

Maxim Lott is Executive Producer of Stossel TV and creator of ElectionBettingOdds.com. He can be reached on Twitter at @MaximLott

*This article, published on 1-23-20, has been updated.