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Trump versus Obama: an economic review of the Presidents’ first two years.
(Note: related companies are at base of the story and all the sources listed in the "Balanced" section)
The first half of President Trump’s first term of office is over. And whether or not the administration did a good job in office probably depends on one’s political persuasion. But what do the facts say? As you might expect, some data points favor the Trump administration and some favor the Obama administration. This article is not meant to be a commentary on performance but simply a scorecard of key economic indicators during each president’s time in office. Here’s a look at the two presidential economies at the midpoint of their first term.
The federal debt level rose slower under the Trump administration. The federal debt continues to rise no matter who is in office. However, it increased at a slower rate under President Trump than President Obama. During the first two years of the Trump administration, federal debt rose from $18.9 trillion to $20.2 trillion (6.9%). The first two year of the Obama administration saw debt levels rise from $10.9 trillion to $14.0 trillion (28%).
The stock markets performed better under the Obama administration. The stock markets rose sharply the first year of President Trump’s tenure but fell in the second year ending the two-year period with gains of 19% (DJIA) and 12% (S&P Comp). By comparison, the DJIA rose 32% and the S&P Comp rose 66% in the first two years of President Obama’s first term. The disparity is even larger if one looks at the entire eight years of President Obama’s tenure as the DJIA and S&P rose 125% and 180%, respectively.
The federal deficit also fared more favorably under the Obama administration. Federal deficit numbers are reported monthly and the last number to be reported was for the month of October 2018. Consequently, we will use seasonally adjusted numbers to best compare across different months. The federal deficit for the month of October was $55.5 billion. This is a 26% increase over the month of December 2016, the last month of President Obama’s term. Under President Obama, the federal deficit declined. The federal deficit fell 3.4% between 2008 and 2010, declining from $42.5 billion to $41.0 billion.
Many key economic figures do not show a clear winner because they are incomplete. Federal budget numbers are reported annually, so the last reported numbers represent the year 2017 and do not factor in the impact of tax cuts. The federal budget deficit in 2017 was $665 billion. This is up 51% from the 2016 deficit of $439 billion. While that is a large jump, it pales in comparison to the jump in the deficit during the first two years of the Obama administration when the administration was pursuing a policy of expansion. During that period, the deficit rose from $459 billion to $1.3 trillion, a whopping 182% increase. It should be noted however, that during Obama’s last year, the deficit fell back down to $439 billion, a 4.4% decrease over the eight years in office.
The unemployment rate has dropped sharply under President Trump declining from 4.7% to 3.9%, a 17% decline. During the first two years of President Obama’s administration, unemployment rose from 7.3% to 9.3%, a 27% increase. Like the rise in the federal budget deficit, the increase in unemployment was short-lived dropping down to 4.7% by the time Obama left office. This represents a 36% decline in the unemployment rate during President Obama’s time in office, a sharper decline than during the Trump administration.