Fact is, there is much noise and chatter surrounding the current Trump presidency. A lot of it, arguably, is self-inflicted: Russia, Jim Acosta, the controversial Tweets, even Rain Gate and Rake Gate. Lost in all of this, though, is the job President Trump has done in steering the U.S. economy, which is booming at the moment.
With that in mind, here is a look at how the U.S. economy has so far fared in 2018, under the stewardship of President Trump. This review will delve into some important sectors, all of which impact the economy to varying degrees. But before tackling these sectors, it is worth emphasizing yet again how the president has led this remarkable economic resurgence. In the words of finance expert Jeff Cox, President Trump “has set economic growth on fire,” and this boom is “uniquely his” and his alone.
One of the hallmarks of the Trump Administration has been job creation, and that has continued this year. Data from Trading Economics show that from February of this year up to October, the employment rate in the U.S. has held steady at over 60.3% — a full percentage point higher than the 68-year average of 59.33%. Nonfarm payrolls have also increased this year, even breaching 250,000 in October. But just as important, wages have increased as well. In fact, wages this year are at their highest levels since April 2009. This means that more Americans now have jobs, and are actually earning more.
Notably, President Trump’s economic policies reversed an Obama-era trend where the overall employment rate grew much faster vis-à-vis employment in the manufacturing industry. In other words, more and more manufacturing-related jobs are being created under this administration as compared to its predecessor. A Forbes comparison of the last 21 months of the Obama presidency and the first 21 months of the Trump administration shows that the latter has been able to create far more jobs — up to 10 times more, in fact — in the manufacturing industry as opposed to the former. Much of this renaissance, obviously, can be traced to President Trump, who has restored business confidence pretty much across the board.
As stated earlier, business confidence in the U.S., has been restored under this administration, and is in fact soaring. The reason for this, mainly, is President Trump’s decision to soften regulatory requirements and push for more across-the-board deregulation, thereby making it easier to put up a business. With the president relaxing federal rules, business leaders began investing more capital as worries about red tape and capricious changes in rules dissipated. The manufacturing industry has been one of the biggest beneficiaries of President Trump’s business-centric policies, along with the mining and leasing sectors.
The U.S. stock market is a beacon of strength as pointed out here previously on Moneyball Economics. It has remained largely flat throughout 2018 even as President Trump started trade wars against China and Germany. The former’s Shanghai Composite actually dropped by 25% since February of this year, while the latter’s DAX fell 10% in the same period. The U.S. stock market, in contrast, did not falter, although it has shown signs of cracking these past two months, largely due to fears of economic deceleration and the fading impact of tax cuts. The recent drops in Nasdaq, the Dow, and the S&P 500 has somewhat undone their gains for the year, but the fact that they have held steady for much of 2018 is undeniable proof of how robust the U.S. economy is.
Real estate has not exactly boomed per se in 2018, but it hasn’t died a painful death either. There is a slowdown, yes. But curiously, it can actually be attributed to the vibrant, growing U.S. economy. The housing market is “a victim of the economy’s success,” with the Federal Reserve raising interest rates to keep inflation in check. This has resulted in more expensive mortgages, which have caused hesitation among buyers, even with their increased purchasing power. There are, of course, other factors at play that have contributed to this real estate slowdown. Two such factors are the tariffs on imported lumber and the crackdown on immigrants, both of which have made homebuilding more expensive in the first place. Exacerbating the situation are real estate-related taxes that make buying property needlessly costlier. The mortgage recording tax — imposed on the states of Alabama, Florida, Kansas, Minnesota, New York, Oklahoma, Tennessee, Virginia, and Washington, D.C. — is a prime example in this regard. This levy is charged when inputting a transaction as a matter of public record. New York’s archaic mansion tax is another example. Yoreevo explains how the mansion tax hasn’t changed since it was introduced in 1989. This means that a million dollar apartment in 1989 would have bought you a much larger property than today, where buyers now have to pay double the amount for the same type of apartment. Despite all this, real estate experts foresee things balancing out, perhaps as early as next year, on the strength of the healthy economy and the equally robust labor market. In other words, property buyers will eventually start buying homes and other property because the strong economy have given them the capability to do so.
The U.S. economy is a good as it has ever been, and the president, despite all the noise and chatter, deserves plenty of credit. He has helped steered the economic juggernaut that is the United States of America into a historic 2018, and an even better 2019 looks infinitely possible.