My final Trump jobs installment

I've written a lot over the past several years comparing job creation under presidents Trump and Obama. The consistent and now enduring conclusion is that job creation was far stronger under Obama than Trump when we compare adjacent intervals.

The final month of meaningful comparison was February of this year, the last month of positive growth before the massive job losses related to the pandemic. In that month 251,000 jobs were created, followed by 1.4 million jobs lost in March, and a mind blowing 21 million jobs lost in April.

In his 37 months from February 2017 through February 2020, Donald Trump created 6.84 million jobs, for a monthly average of 184,757.

In the final 37 months of his presidency, through January 2017, Barack Obama created 8.25 million jobs, for a monthly average of 223,081.

Thus, on average over those two adjacent intervals, Obama created a whopping 38,324 more jobs each and every month than Trump.

It does not matter which intervals you compare. I have compared many these past several years, and Obama consistently smokes Trump.

My first crack at this was to compare February through November of 2017 under Trump, with February through November of 2016 under Obama. Obama created almost 26,000 more jobs per month than Trump.

In June of 2018 I went a little overboard and compared Trump's first 16 months with every 16-month interval in Obama's last 5 years. Of the 40 such intervals under Obama, Obama beat Trump in all but 5. Those 5 intervals all began in 2012, in Obama's first term, when the nation was still digging out of depression.

In February 2019 I wrote of the absurdity of Trump's claiming he had launched an "economic miracle" (Trump's words). Not only did Obama consistently create more jobs than Trump, but GDP growth under Trump has been quite unspectacular as well. Trump's best year was 2.9 percent in 2018, which matched Obama's best year of 2.9 percent in 2015. GDP growth declined to just 2.3 percent in 2019. And by the way, judging by both job creation and GDP growth, the Republican tax cut did nothing useful for the economy, although it did increase the annual budget deficit by a few hundred billion dollars.

In July 2019 I showed "Two Charts"—total employment, and the unemployment rate—which demonstrated that job growth and unemployment decline under Trump was at best a continuation of a very long term trend that had begun many years earlier. With respect to jobs, there has been no "Trump effect" whatsoever. And as I've repeatedly described here, job creation has actually slowed under Trump. I have also consistently said that such slowing is to be expected as an economy approaches full employment.

In December 2019 I explained why Trump's taking credit for the very low unemployment rate was not only unjustified—it was also absurd.

Which gets us to the absolutely miserable year of 2020. The economy lost a staggering 22 million jobs in March and April. Job growth resumed again in May, and through September 11.4 million jobs have been recovered. So only around half the jobs lost have so far come back. The current number of net jobs lost to the pandemic at this point far exceeds the 8.7 million jobs lost during the Great Recession, which began in Q4 of 2007.

You can view the monthly jobs data in the graphic below, or directly on the Bureau of Labor Statistics web site. (Click on the image for a larger look.)

 

Source: Bureau of Labor Statistics

The strong job growth of May (2.7 million) and June (4.8 million) was largely a result of the massive relief packages passed by Congress, and massive liquidity injections by the Federal Reserve, coupled with an often misguided or mishandled rush to reopen the economy. But those relief packages have not been renewed, and the essential support they provided to the economy is gone. The House passed an additional $3.4 trillion package more than three months ago, but it was not taken up by Senate Republicans, who are highly skeptical of additional spending. The sides have been long deadlocked. (Senate Republicans proposed a less than $1 trillion package, which was Democrats deemed insufficient. The House did propose meeting in the middle with a $2 trillion package. That was rejected by Senate Republicans.)

The bad news is that the rate of job creation is rapidly declining. July saw 1.8 million jobs added, followed by 1.5 million in August, and only 661,000 in September. Most of the remaining lost jobs will be very difficult to recover. Many are in essence lost for good. That's no surprise: A large proportion of small businesses have failed and are unlikely to come back in the near term if at all.

The economy could be headed for a new shock as we head into the fall and winter. Cases and deaths from the coronavirus are likely to rise significantly. A massive wave of evictions could cause additional negative feedbacks to ripple through the economy. Evictions have been somewhat forestalled by order of the CDC, which is kind of bizzare. But these are strange times. That CDC-ordered evictions pause, however, does nothing to help landlords, who are left holding the bag and their own financial obligations. Meanwhile, lower income Americans are in very bad shape, with one in four adults reporting they're having trouble paying their bills. That increases to 46 percent in lower income adults. Lines are long at food banks and pantries, and include many who are shocked to find themselves in such a circumstance for the first time ever.

It is not unfair to say that Trump even gets dinged for jobs lost because of the pandemic, because the administration has done such a dismal job of managing it by almost any measure. Better pandemic management would have benefited the economy, and thus employment. In any case, it's likely that Trump will preside over a net job loss over his time in office.

It gets stranger yet. As I write this it's been reported that Trump himself has tested positive for the coronavirus, as has the first lady, and Trump's close adviser Hope Hicks, and god knows who else. Mask wearing by White House staffers has been uncommon. It's reported that the president has mild symptoms. All this a little over a month before the election. By mid-day, the financial markets aren't off as much as one might fear.

Copyright (C) 2020 James Michael Brennan, All Rights Reserved

The latest from Does It Hurt To Think? is here.