The weak dollar has helped President Trump, in the latest rendition of the Yahoo Finance Trumponomics Report Card.
Trump’s grade on the economy improved from B in December to B+ in January, due largely to a modest increase in exports. That boosted Trump’s performance on exports one notch, from the third-best of four presidents since 1992, to second-best. Here’s a snapshot of Trump’s overall performance on the economy so far:
We measure the economy under Trump compared with its performance under the six prior first-term presidents, using data supplied by Moody’s Analytics. For exports, the data only goes back to the early 1990s, so we compare Trump with three prior presidents. For each of the six indicators used in our report card, we compare the data for Trump with the same data at the same point in prior presidencies, going back to Jimmy Carter. (Here’s our full methodology.)
Exports improved in November largely because of the weak U.S. dollar, and strong demand for American goods overseas. The economy in most parts of the world is generally improving, just like the U.S. economy is. Synchronized global growth has a self-reinforcing effect that adds a bit to overall growth.
The economy under Trump is also doing well on employment—including manufacturing employment—along with stock prices. Even so, there are some tough comparisons. Job growth was stronger at the same point in the first term of Bill Clinton and Jimmy Carter, with both presiding over an economy rebounding from recession. GDP growth was stronger under Carter, for much the same reason. And stocks performed better at the same point in President Obama’s first term, as a stock-market free-fall ended and a long bull-market rally began.
Timing is everything when it comes to presidential economics, especially during a president’s first year or two. The economy moves in long arcs, and every president generally inherits the economy that dominates his first year. In Trump’s case, his promise to cut taxes—now fulfilled—and slash regulations certainly generated some optimism among business owners and investors, which might be contributing to growth now. But the pace of job growth during Trump’s first year has actually declined slightly from prior years, and economists think growth could slow in 2019 and 2020—with a recession even possible around the time Trump would be running for reelection.
Political partisans generally credit their favored politicians for a strong economy and blame opponents for problems. So if you support Trump, you think he’s suddenly responsible for a strong economy, and if you dislike Trump, you give Obama the credit.
This goes too far, in both directions. Many factors besides presidential action affect the economy, including Federal Reserve policy, corporate decision-making and the overall direction of the business cycle. As Trump enters his second full year in office, the economy will more fully belong to him—but it will still do its own thing. We’ll provide the grades all along.
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Rick Newman is the author of four books, including Rebounders: How Winners Pivot from Setback to Success. Follow him on Twitter: @rickjnewman