2020 US presidential campaign enters into discussion around the economic legacy of Donald Trump.
In the first two years of Trump’s rule in the United States, a record 6 million new jobs were created. Unemployment fell to 3.6% – the minimum in 49 years. And unemployment among minorities is at a minimum for the entire observation period since the 1940s. Almost in all areas there is an acute shortage of personnel. Wage growth reached 3.2%, the maximum rate since the mid-90s.
Such state of the economy greatly complicates the task of the Democrats to show Trump’s presidency as a “grim era in American history”, which they want to complete as quickly as possible. Democratic presidential hopefulls recognize that unemployment is indeed low. But they are trying to connect it with the fact that people have to have two or three jobs to support their families.
There is another popular democratic point of view: economic growth began under Obama, Trump has nothing to do with it, he has no merit.
It is clear that such statements do not hold water. The percentage of people with two jobs or more is declining. Salaries of low-income Americans grow almost twice as fast as those of the middle class and the rich. Obama got a period of post-crisis economic recovery, but with him, for example, annual GDP growth never exceeded 3%.
The current state of affairs in the economy is primarily the result of Trump’s tax and regulatory reforms. If there were no fiscal stimulus in 2017, it is likely that the United States would already be in a state of recession (or at least very deep stagnation).
Trump was able to significantly postpone the threat of recession and extend the life of the current business cycle. However, in any case, it is coming to its logical conclusion. During the week, the Federal Reserve made the first (so far technical) reduction in the rate corridor.
The worsening dollar cash deficit is forcing the White House to increasingly demand a full cut from the Fed. Donald Trump himself, Vice President Mike Pence and Senior Economic Adviser Larry Cudlow want a lax monetary policy to prevent financial market failures before the November 2020 elections. And they can certainly be expected, especially in the case of a worsening trade war between Washington and Beijing.