"The Committee" has declared me "unmutual," and... I am. They're right, of course. Quite right. I look at actual data. Is Trump a festering boil on the body politic? Yes. Does he have a clue what he is doing? No.
Does it follow from that that the economy sucks?
No.
Trump bragged yesterday because he is Trump. He bragged about the economy being the best ever. For those of us who detest Trump, it is useful to check in on the actual data. How is the economy, objectively? For that, we turn to my good buddy, FRED. Federal Reserve Economic Data. Numbers are awesome. Let's just do the big time series for a few things, to keep everything in perspective. You know, perspective? That thing I keep prodding everyone to take? Let's start with GDP.
How's it doing? GDP is growing, but see all of those spikes in the post-WWII period? We are nowhere near those. In numeric terms, GDP is larger than it has ever been, but the rate of growth? Nothing special. GDP is larger than it has ever been, but except during and immediately after recessions, that's always true. The key thing to examine is growth. Nothing special here. We are still in a long period of growth, but a nothing-special rate of growth. Next up, how about unemployment?
Here, we are doing pretty well. The last time we touched a rate this low was around the tech bubble, and before that, the late 60s. There isn't any sign that we are in a tech bubble, or anything comparable, so the employment situation really is pretty good. I'll come back to the labor force participation rate in a moment.
Of course, remember the tradeoff between unemployment and inflation? It is hard to have a low rate of unemployment and a low rate of inflation. If everyone has a job, firms start raising prices because they can, but if nobody has a job, prices are kept low because nobody can raise their prices without losing business. The old Phillips Curve. If unemployment is low, how is inflation? Let's check in on consumer prices.
Not too bad! Particularly compared to that wretched period in the late 70s... There are plenty of inflation measures I could have thrown up here, but you get the point. Inflation is low. This raises a lot of questions of economic policy and theory, but in terms of unemployment and inflation... Damn. Nice. So, how about that unemployment rate thing? Remember how we compute the "standard" rate of unemployment. (I'll spare you the lecture on U1 through U6 for today...) You aren't counted as unemployed if you have been out of work for more than six months, and such. So, it is also important to look at measures such as the labor force participation rate. If low proportions of the population are in the labor force, that low unemployment rate doesn't mean as much. So, labor force participation...
Lower than it has been. This is kind of the fly in the ointment of the economy. Why didn't it go back up? Hard to say. One more thing-- the stock market. Here's the S&P...
Yup. Recovered nicely. We aren't at all-time highs, and there have been some freak-outs, particularly because of Trump's idiotic fucking trade war, but the stock market is doing great, in the big picture.
So, how are things doing? Quite well. What do we learn?
1) Not the all-time best, but pretty good.
2) Trade wars are stupid, and Trump needs to cut this shit out.
3) Presidents have little impact on the economy, which most scholars already knew.
4) The most important role for presidents is in handling crises, which Trump hasn't faced.
That said, we have yet to see what the long-term effects of certain policies will be. As always, though, remember to look at objective data, and not to assume that everything sucks just because the President is an idiotic sociopath.
The fact that the economy doesn't suck, though, doesn't mean we are safe.