Battle rages over Obama's economy

Battle rages over Obama's economy
© Greg Nash

Hillary ClintonHillary Diane Rodham ClintonMatt Gaetz ahead of Mueller hearing: 'We are going to reelect the president' What to expect when Mueller testifies: Not much McConnell challenger faces tougher path after rocky launch MORE and Donald TrumpDonald John TrumpUS-Saudi Arabia policy needs a dose of 'realpolitik' Trump talks to Swedish leader about rapper A$AP Rocky, offers to vouch for his bail Matt Gaetz ahead of Mueller hearing: 'We are going to reelect the president' MORE are jockeying for position on the U.S. economy amid conflicting signals about its trajectory and growth. 

Friday’s report on job creation was widely hailed by economists as robust. The White House touted it as evidence that President Obama’s handling of the economy has been a success.

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Clinton has repeatedly argued on the campaign trail that Obama deserves more credit for the economic gains made under his watch. Implicit in that message is that voters should keep a Democrat in the White House, rather than make a wholesale change by electing Trump.

“As long as the economy remains relatively firm through November, that would seem to bode well for Hillary Clinton, who is seen offering continuity and, dare I say, a steady hand,” said Mark Hamrick, senior economic analyst for Bankrate.com.

Yet polling consistently finds that voters are unhappy about the economy and trust Trump more than Clinton to manage it. Given such sentiments, Clinton isn’t seeking to take a victory lap.

She has spent the past week selling her 100-day jobs plan around the country. During those events, she has talked about a recent study by Moody’s Analytics that concluded her economic proposals would create 10 million jobs in her first term. That same study found Trump’s plan would lead to 3.4 million in job losses and a lengthy recession.

Clinton said “what little we know about [Trump’s] economic policies — from running up our debt to starting trade wars to letting Wall Street run wild — could devastate working families."

Trump, meanwhile, has painted a dire picture of the economy at his rallies. He says trade deals need to be renegotiated or scrapped to bring jobs back to America. 

Both candidates have government figures they can point to when making their case.

For the labor market, Friday’s report was chock full of good news. 

The U.S. economy added 255,000 jobs in July, well above economist expectations, and the unemployment rate held at 4.9 percent for the second straight month.

Since early 2010, the economy has added 15 million jobs, rebounding from heavy losses during the recession.

And economists expect the economy to hit full employment by the end of the year for the first time since late 2007, before the recession started. 

Participation in the labor market also ticked up, according to the report, and wages for private sector workers have increased about 3 percent so far this year.  

On average, the economy has added 190,000 new jobs per month over the last three months.

Douglas Holtz-Eakin, president of the conservative American Action Forum, said the report is the “first month in recent memory that doesn’t have some significant downside.”

But data on overall economic growth of the U.S. economy has not been as bright. The nation’s economy grew just 1.2 percent in the second quarter of the year, and 0.8 percent in the first three months of the year.

On Friday, House Ways and Means Committee Chairman Kevin BradyKevin Patrick BradyBlue states sue Treasury, IRS over rules blocking Trump tax law workarounds Manufacturers group lobbies Congress for new North America trade deal Lawmakers join Nats Park fundraiser for DC kids charity MORE (R-Texas) cited a recent Gallup poll showing that only 35 percent say the nation’s economic conditions were "getting better" while 60 percent say they were "getting worse.

“Over seven years later, Americans are still waiting for the economy they deserve,” he said. 

The Gallup figures are in line with an Associated Press poll in May that found a sharp contrast between what Americans think about the condition of the economy and their own financial situations.

Only 42 percent in that poll said the U.S. economy was in good shape, and only 22 percent said the economy has mostly recovered from the 2008 recession.

Yet 66 percent of the respondents said that their financial situations were positive.

In addition, 93 percent of respondents to the AP poll said they expect their household finances will improve (43 percent) or stay the same over the next year.

Mark Zandi, chief economist of Moody’s Analytics, said wage growth is a key factor in the election. Voters “know the economy from their own prism and perspective and they know if the economy is good or not good,” he said.

Wages have been long expected to pick up once the labor market improved.

"Wage growth will continue to accelerate into 2017 as the job market gets even tighter, and will spread to more workers," said Gus Faucher, deputy chief economist at PNC.

"However, it's unclear if that will be enough to reduce the unease and anger that many voters are feeling ahead of the election," he said. 

A CNN poll out this week gave Clinton a slight edge over Trump on the economy question, while he retains an edge in a new Fox News poll.

As the gap closes, Trump appears to be refining his economic message. His campaign rolled out an economic advisory team Friday, and the candidate plans to make a major economic address Monday in Detroit. 

Trump’s team says one strong jobs report is not enough to convince Americans that the country is on the right economic track.

“You can't look at one month and say I'm not going to do an improvement in the economic program," said David Malpass, who was recently named to Trump’s economic advisory board, on CNBC. 

But if strong jobs data commands headlines and drives up the stock market, Clinton could gain the advantage on the economy.

“Today's numbers will continue to help HRC as the theme of ‘continue Obama's economic policies’ will drive the Democrat's messaging and hurt the Republican narrative that the country is going down the tubes,” said Andrew Busch, editor of The Busch Update, a political and finance newsletter.