As a point of disclosure, I think Donald Trump is a terrible President. I cannot help but dislike the man. I don’t care about his hair, his orange complexion, the size of his hands, his inability to string together coherent sentences or his alleged infidelities. Ultimately these are irrelevant to the job, though speaking coherently would be a definite bonus. I really don’t understand how so many people in the United States could have voted for him and he seemingly is retaining his popularity, at least with those with Republican leanings.
Some, including Trump himself, have pointed to how well the economy is doing under his administration. Anyway, here below are some data on some economic indicators on how well the USA has been doing for the last 29 years including the last two and a half years of Trump’s tenure. Most of the indicators are taken from: U.S. Bureau of Labor Statistics (www/bls.gov). Here is a link to the graphs.
Some of the graphs from the link above are reproduced below and I have commented with some context from my perspective. The graphs themselves:
- are seasonally adjusted, 1990–2019,
- have shaded areas representing recessions as determined by the National Bureau of Economic Research (NBER).
The first graph shows an increase in the civilian labour force, culminating in a current work force of about 163 million. There was little increase in the workforce during the last recession and a couple of years afterwards.
The rate of the growth of the work force growth resumed a couple years after the recession. I would guess the slowing in growth would have been young people not entering the job market and people taking early retirement packages.
The graph below took me a while to understand. It shows ratio of people who are working and looking for work compared to those who could work, ie the *civilian noninstitutional population. The institutional population includes, the armed forces, people under care and those in prisons.
* 50 States and the District of Columbia who are not inmates of institutions (penal, mental facilities, homes for the aged), and who are not on active duty in the Armed Force.
The participation rate dropped since the last recession from 66% to 63% and has been part of a longer twenty-year trend. In 2015 the participation rate has remained steady. This is in large part likely due to baby boomers retiring. Other reasons include giving up looking for work, medically incapable to work, opioid use, going back to school or staying in school longer.
Part time workers
The fraction of people working part time work is not necessarily a good metric for an economy … because it would include people like me who have retired but still enjoy the work in some way. (And the money is nice). Not everyone would want full time work either, kids etc. Also, there are benefits to employers to minimize the hours for any particular worker; this is not necessarily a societal benefit though, but is a different issue.
The thing to note is that as the recession ended, the rate of part time employment stopped increasing and started to decrease and this has been steady into Trump’s term. It’s approaching the lows that preceded the previous three recessions.
The civilian unemployment rate is the ratio of people looking actively for work compared to the civilian non-institutional population
The graph shows unemployment starting to go down immediately as the recession ended. Indeed, it could be part of the definition of recession. The decrease in unemployment was steady and at a 5% unemployment rate the trend slowed. Today it is below 4%, which is good.
The graph below compares unemployment for people 16 to 19 in age to the rest of the population.
Young people were hit hard compared to adults by the 2008 recession, likely they were not being hired coming out of school. The good news is the youth unemployment rates started dropping noticeably in 2013 and have been steady to the present time. Likely what happened is the youth of the early five years of the recession outgrew their age category. The unemployment among the youth is at its lowest over the last thirty years.
Interestingly, in the general population, women faired slightly better than men when it came to unemployment. In 2016 young women also faired better in not being unemployed.
Unemployment by ‘origin’
Quite often we hear it said under Trump’s regimen, the black unemployment rate is the lowest it has been. Based on the data below this is an accurate statement. The unemployment rate for blacks is about six percent. As a historical precedent, this is not bad; but of course, there is room for improvement.
The graph also has some interesting insights. During the last recession the unemployment rates jumped by about 5% for white people, 6% for Hispanics/Latinos and over 8% for black people. During Obama’s term the unemployment rates dropped less rapidly for white people and the unemployment gaps were closing. The positive trends continued into Trump’s term. Obviously, these trends have to slow. About a year ago the unemployment rate for black people stopped improving while it continued to improve, albeit, more slowly for whites and Hispanics/Latinos. It will be interesting to see if these trends continue.
Wages and Salaries
The graph below is a comparison of the mean and median annual personal wages since 1975. Despite the various recessions over the forty-year time period the salary increase has been relatively steady.
Being a steady increase is not necessarily a healthy phenomenon. The median income rose on average by about 630 $/y and the mean by about 955 $/y. The problem is in the late seventies that is about a 9% increase in income and these days about 2%. Today inflation is low (apparently) and back in the late seventies it was high. In short, our salaries are not increasing our wealth; but are keeping up with inflation by and large.
The fact that median salary is lower than the mean (average) means incomes are skewed, higher earners earn disproportionately more. This is not surprising in a way, in that there is a bottom to a wage; but the upper end is open ended. Steven Pinker argued that because we can in some ways buy far more with our salaries the disparity is not as bad as it seems. This may be worth revisiting another time, another place.
Also, the difference between the mean and the median (expressed as a percentage, yellow line) has grown from about 35% percent to 50%. This means those earning more money are earning relatively even more money. This is no surprise.
Quite often we hear Trump or one of his representatives highlighting the fact stock market has reached new highs. This news sound bite is what prompted me to write this blog. While the claim is accurate it is pretty much meaningless. Imagine we put some money in the bank with a modest monthly interest rate. Every month our bank account would hit a record high. Your only risk is your bank going bust.
Of course, the stock market is not a bank, but that is where your bank earns your interest. The graphs below show the historic trends over the last hundred odd years (bottom left). And the upper right graph focuses on the last eleven years or so. The first thing to note is that the value axes are on a logarithmic scale. This is entirely appropriate as the slope of the graphs capture the return on investment. Also, visually the magnitude of the various rises and falls in the market are easily recognized. If we compare the 1928 crash with the 2008 crash the 1928 crash was far more severe in real terms than the 2008 crash even though the dollar value was higher in 2008.
Focussing on the Dow, generally there has been a steady increase in the value of the stock market. The 1928 crash was horrendous, it took almost thirty years to catch up, but there was World War II in between. In the sixties and seventies there was an economic stagnation. I will have to read up on the underlying causes for that. In the eighties things picked up again to this day with the odd recession along the way. Looking at all this it should be remembered the past is not necessarily an indicator of the future.
Over the last ten years or so the markets have risen more or less steadily. There was a bit of the plateau in 2015 and 2016 and similarly the markets could be plateauing at the moment. Are these plateaus just uncertainty in the market due to the forthcoming election or was there something more fundamental? Either way the recovery started during Obama’s term and continued into Trump’s term. This was true for just about every metric that I looked at. Has Trump actually done anything economy-wise that has affected the market or is the market a Titanic heading for the next iceberg? At best, we can say is the Trump’s administration has not [yet] reversed the trends in the economy we had during Obama’s administration. Having said that the US economy is a juggernaut (until it isn’t).
Comparing the income trend with the stock market trend, the former has been linear, and the latter has been exponential. Consequently, if we have enough spare cash to dabble wisely in the stock market we can get ahead of the game, assuming we can stand the risk and have the patience to ride out the vagaries of recession. Or at least that has been true in the past.
Just as an aside, look at the data for 1999 for the various indicators as we moved into the Bush II term.
There is a wealth of data at the Bureau of Labour Statistics, and it would take me years to create a meaningful hypothesis; so, my cursory browsing through their pages should be taken with a pinch of salt.
Trump at large
Why do I dislike Trump? Well, I suppose it started when I was flicking through the channels way back when, and he was mucking around on The Apprentice. I remember thinking one of his companies was going into chapter 11, and he had nothing better to do than this? What about his responsibilities to his real employees? Anyway, Trump as President:
- While I was not aware of it at the time Trump was promoting that Obama was born outside of the USA (birther). If Trump believed this was true, then he has not done his homework. If he did not believe what he was promoting, then that makes him a cynical liar.
- Trump when appealing to his supporters, at least at his rallies, appeals to the negative aspects of our psyches … primarily fear and self importance.
- The man is divisive and plain rude.
- Can’t stick to agreements: from CNN
- Trump seems to be a compulsive liar.
- He also seems to self aggrandize to the point of narcissism, for example claiming “They love him like he is the second coming of God” and in El Paso/Dayton “I went into those hospitals, the love for me – and ‘me’ maybe as the representative of the country – but for me, and my love for them was unparalleled, these are incredible people … ” These are just a couple of recent examples.
- Environmental record: Nevermind global warming, while industry to some extent does have an adversarial relation with the EPA, they do understand it has a vital role to play. Weakening the EPA will only benefit the fly by night companies. Reputable companies won’t step back from the standards they have achieved.
- He has effectively lost the trust of his allies.
- He is risking economic turmoil with China; there does not appear to be a strategy or goal, other than beyond a slogan.
- And what on Earth is he playing with Putin and Russia? Being in the G8 never stopped Russia annexing/invading The Crimea. What does Trump think he will get from Russia now?
I could go on, but I won’t.
So, if we don’t believe in free will, how do we approach all this? I don’t think labour statistics or stock markets have a will of their own nevermind a free one. Could the world (or universe for that matter) have unfolded any other way? I think not. But we can nudge it a direction we want.