Economy & Budget

OPINION: You can’t deny Trump’s tremendous effect on the economy

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While the Democrats and their media allies attempt to bring down the Trump presidency with a determination reminiscent of Wile E. Coyote’s pursuit of the Road Runner, the president’s efforts to shrink the size and scope of government are producing some very positive economic results.

President Trump’s focus on reining in the administrative state has significantly reduced both the number of existing regulations and the output of new regulations, driving business optimism. Unlike policies that increase the oppressiveness of government, policies that incentivize business growth (like deregulation) produce jobs, opportunity and prosperity.

{mosads}It takes real determination to ignore the numbers. According to the Bureau of Labor Statistics, the number of people working increased by 395,000 from February to May of this year. By contrast, the increase for the same period last year under President Obama was 15,000. Now at 6.9 million, the number of people unemployed is at its lowest level since May 2007, seven months before the recession began.


The unemployment rate hit a 16 year low of 4.3 percent in May, continuing its post-recession trend. But the official unemployment rate can drop for reasons other than labor market strength, such as people dropping out of the labor force or working part time jobs because they are unable to find full time jobs.

A better indicator of labor market strength is the U-6 unemployment rate, a broader measure that many economists consider the real unemployment rate. It counts people as unemployed for a year (rather than just 30 days) after they give up their job search and counts people as unemployed who are working part time because they are unable to find full time jobs. At 8.4 percent, this measure has dropped a full percentage point since January and is now at its lowest level since November 2007, the month before the recession began.

The percentage of Americans working is also higher. The four months following President Trump’s inauguration are the only months since February 2009 in which 60 percent or more of Americans were employed. For prime working age Americans, or those 24 to 55 years old, the percent employed has increased to levels last seen in late 2008.

And, the jobs are better. Since February, the number of people working full time has increased by 589,000 while the number working part time decreased by 188,000. For the comparable period last year, full time workers increased 22,000 and part time workers increased 75,000.

Given these numbers, it’s not surprising that the Department of Labor recently reported an impressive drop in initial claims for unemployment insurance. For the four-week period ending June 3, the moving average was 1.92 million people, the lowest level recorded for this average since Jan. 12, 1974 when it was 1.90 million. Notably, there are 68 million more people in the labor force today than there were in 1974.

People are also making more money. The independent research firm Sentier recently reported that median household Income has surged since the beginning of the year to $59,361, and “finally surpassed” the level when Sentier began compiling the data in January 2000, which was $58,846. It actually increased more in the first three months of the Trump presidency (about $1,300) than it did during the entire seven and a half years of the Obama recovery (about $1,000).

Investors are obviously ignoring the political gamesmanship and watching the numbers. Since the election, the Dow Jones Industrial Average, the NASDAQ, and the S&P 500 have generated total returns of 17.8 percent, 20.5 percent, and 15.0 percent, respectively, through last Friday.

On the home front, the National Association of Realtors recently reported that existing home sales hit a 10-year high in March. In April, “low supply levels held down existing-home sales” but “pushed the median number of days a home was on the market to a new low of 29 days.”

Given increased stock and home values, the Federal Reserve reported that the net worth for U.S. households and nonprofit groups set a record high of $94.8 trillion in the first quarter of this year, exceeding the 2007 pre-recession peak by an impressive $27 trillion.

As a further indication of a strengthening labor market, April job openings hit 6 million, the highest number recorded since the BLS started tracking the data in 2000. While the benefits of increasing stock and real estate values obviously go to the people who own those assets, the benefits of increased employment opportunities are open to everyone.

Nonetheless, people are not reentering the labor force at the desired levels. The percentage of Americans in the labor force has been at or below 63 percent for 38 consecutive months. That’s a low last seen in the 1970s and is not solely attributable to Baby Boomers retiring. The BLS reported that in May there were 5.6 million Americans who were not in the labor force that “want a job now.” One major obstacle they face is what experts call the “skills gap”, or too few laborers with the skills needed for the open positions.

To address this concern, President Trump is emphasizing workforce development. The reality is that not every good-paying job requires a four-year college degree and the accompanying debt. The president plans to expand apprenticeship programs and accreditation for vocational training programs. According to the Department of Labor, individuals who complete apprenticeship programs “earn an average starting wage of $60,000 per year” and, on average, “earn $300,000 more than other workers over their careers.” Working with the private sector to train Americans for the jobs that exist will help get people back into the workforce.

The results through the first four months of the Trump presidency are clearly impressive. More Americans are working at better jobs, new claims for unemployment benefits are at a 44-year low, and median household income, household net worth, and job openings all set record highs. Some might call that “tremendous.”

Now, it’s time to pass tax and healthcare reform.

Andy Puzder was chief executive officer of CKE Restaurants for more than 16 years, following a career as an attorney. He was nominated by President Trump to serve as U.S. labor secretary. Follow him on Twitter @AndyPuzder.

The views expressed by contributors are their own and are not the views of The Hill.

Tags Americans Business Donald Trump economy Jobs Labor Wall Street White House workforce

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