Greatest Economy Ever? Not So Much

President Trump touts his record on the economy as being “the best economy ever,” with a special emphasis on job growth.  And, to be fair, job growth since he was inaugurated has been reasonably strong and reasonably consistent.  Beginning with January 2017, and measuring employment growth over each successive 12-month period (to smooth out month-to-month blips), employment growth has been steadily around 1.5% to 2% for every 12-month period.  


But…In the period beginning in January 2012 through the end of 2016, employment growth was almost always over 2% for every 12-month period through the end of 2016.  Overall employment growth from the beginning of 2012 through the end of 2016 averaged 2.1% across all 12-month periods.  In the subsequent period (through October 2019), employment growth has averages 1.6% per 12-months.  And, in fact, the raw number of new jobs added per month was greater from 2012 through the end of 2016 than it has been since (202,000 per month from the beginning of 2012 through the end of 2016, compared to 195,000 since.


Then there’s the issue of wages.  Inflation adjusted wage growth on an annualized basis fas 1.02% from 2012 through 2016.  Since the beginning of 2017, it’s been 1.03%...or, essentially, the same rate of growth in inflation-adjusted wages before and after…And that’s markedly better than over the full length of the time series (since 1979)—over the past 40 years, the average weekly wages for full-time workers (adjusted for inflation) has increased at 0.2% per year.  But the increase in wages has been anything but smooth—real wages fell by about 10% between 1979 (to about $300 per week), recovered almost all of that loss by 1988, only to see wages fall back to about $300 weekly by 1992.  Again, wages recovered to about $340 per week by2002.  This was followed by a period of stagnation; wages resumed their growth in 2014 and have increased fairly steadily since then. 


But, again, the total increase since 1979 is only 7.5%.  Which is, frankly, awful.  Real total output of the U.S. economy—per person—has grown at an average annual rate of 1.9% since 1947.  If real weekly wages had grown at that rate since 1979, real weekly wages would have (roughly) doubled since 1979…if wages had increased at half the rate of increase of real GDP, the increase would have been 50%.


So…greatest economy ever?  Not so much.
(All data from the Bureau of Labor Statistics web portal or from the Federal Reserve’s web portal.)