This week, we’ll be looking at how the US has fared since Donald Trump was elected a year ago. Today, it’s the economy.
This article will look at some of the key indicators of American economic performance and how they’ve changed since Mr Trump was elected. But we won’t draw any conclusions on who or what might be causing these changes.
Right – let’s take a look at the numbers.
When Mr Trump was elected in November 2016, unemployment stood at 4.6 per cent. It rose during the early part of 2017, peaking at 4.8 per cent in January. Since then, it’s been edging down – with the occasional fluctuation – and now stands at 4.1 per cent.
This is consistent with the downward trend in joblessness we’ve seen since 2010, when unemployment was in touching distance of 10 per cent.
Figures from the US Bureau of Economic Analysis (BEA) show that in the first quarter of Trump’s presidency, real GDP growth was 1.2 per cent, down from 1.8 per cent the previous quarter.
But it seems to have rallied since then, with the second and third quarters of 2017 seeing GDP growth at 3.1 per cent and 3 per cent respectively.
We’ve highlighted the fourth quarter of 2016 below to mark the point at which Mr Trump was elected.
Inflation is measured using the Consumer Price Index – which compares the price of goods and services in an imaginary “basket” of products over time.
CPI inflation rose slightly in the first few months of 2017 – before dropping to 1.7 per cent in May, where it’s remained ever since.
Exports and the trade deficit
Export figures tend to fluctuate more than other economic indicators like GDP growth. When Trump was elected in November 2016, the rate of export growth was in the negative numbers at -3.8 per cent.
The first quarter of 2017, when President Trump took office, saw export growth increase significantly to 7.3 per cent. Although it has been much weaker since then, dropping to 3.5 per cent in the second quarter, and just 2.3 per cent in the three months to September.
The picture’s even worse when we look at the overall balance of trade – that’s the total value of goods and services the US sells abroad minus the total value of everything that Americans import from overseas.
In the second quarter of 2017, the US imported $123.1 billion more than it exported – which means a “trade deficit” of 2.6 per cent of the current value of the US economy.
That’s up from a deficit of $113.5 billion in the first quarter of the year, which was about 2.4 per cent of US GDP.
So overall a mixed economic picture for the US. Unemployment and inflation are lower now than they were this time last year. But the trade deficit is widening, and export growth is falling despite an initial surge at the beginning of the year.
Perhaps the biggest success story has been economic growth, which has shot up to 3 per cent – compared to 1.8 per cent a year ago.
What’s not clear is how much Mr Trump can take credit for this. For example, when growth reached 2.6 per cent in the second quarter of this year, he called it “an unbelievable number”. He claimed “I was saying we will hit 3 [per cent growth] at some point in the not-too-distant future, and everybody smiled and they laughed and thought we’d be at 1 [per cent]”.
But in fact, even before Mr Trump’s election, GDP growth was forecast to hit 2.3 per cent in the second quarter of 2017. Many leading economists have suggested that while Mr Trump’s policies might be boosting economic growth, he’s overstating his own role.