Why? Because Obama has (on average) added more jobs per month over the course of his presidency than Trump has thus far. As he writes:
Trump entered office on January 20, 2017, and starting with February 2017 he has been President for 29 months. Total job growth during that time has been 5.613 million or 194,000 per month with those results being helped by the tax cut.
Working back from January 2017, Obama’s last month in office, there had been 6.423 million jobs added or 221,000 per month. The difference for the 29 months is 810,000 more jobs or 27,000 more per month than Trump.
Ironically, this is true precisely because we have the lowest unemployment rate in 50 years. It’s much easier to add more jobs than you’re reducing unemployment from 10% (as Obama did) than when you take office at 4.7%.
In any economy there is a natural rate of unemployment, meaning that even in an economy where everyone who wants a job can find one, the unemployment rate won’t be zero. Why? Because some workers work jobs that result in seasonal unemployment, while others will be briefly unemployed in-between jobs.
Despite that, the Trump economy is so strong that the unemployment rate is below what the estimated minimum unemployment rate is. The St. Louis Federal Reserve calculates that the natural rate of unemployment is currently 4.6%, while the actual unemployment rate (as of June) is 3.6%. Because the unemployment rate is already below its theoretical minimum, we can essentially only add more jobs each month consistent with population growth (or proportional to the labor force participation rate increasing).
Or to give an impossible hypothetical to illustrate this point further; if the Trump economy were to be at the point where every single person was employed, nobody needed to change jobs, and there was no population growth, there would be zero jobs added per month, but that wouldn’t be reflective of economic weakness (quite the opposite).
Performance Versus Obama’s Baseline is What Matters
A more useful way to quantify Obama vs. Trump economically would be to see how Trump’s economic results compare to Obama’s baseline. When Obama left office the Congressional Budget Office released a whole host of estimates on how various economic indicators would perform into the future if Obama’s policies were left unchanged.
And to little surprise, Trump’s economy is outperforming the hypothetical economy the CBO envisioned for an Obama third term. Council of Economic Advisers Chairman Kevin Hassett outlined as much in a September 2018 speech debunking the notion that the Trump economy was merely a continuation of Obama’s. To summarize many of the metrics where Trump is performing above trend:
- Entrepreneurship is great again, with over 150,000 more business applications being filed each quarter over trend.
- Investment in small businesses is $300 billion higher than we would’ve seen had the trend Obama set continued (as of September 2018).
- Blue collar employment would’ve declined had it continued its Obama-era trend. Instead, it’s grown and broken that trend Obama set. Blue collar employment is growing at the fastest rate since 1984.
- And as the economy booms, not only are the unemployed finding work, those who previously gave up looking for work are reentering the labor force. As they enter the labor force, they’re easily finding jobs, since there are more job openings today than unemployed people.
We know that the Trump economy is beating the Obama economy on every metric, and thus had Trump took office at 9% or 10% unemployment like Obama did, he would’ve reduced that rate at a rate far faster than Obama.
Barack Obama was the first president since the Great Depression to never see a single year of 3% economic growth. It only took Trump until his second year in office to achieve 3% growth (and it would’ve come sooner had his tax cuts not been passed until the end of his first year in office)!