President Donald Trump has plenty of room to brag about the American economy. Calling it the “greatest” on record may be a stretch.
“In many ways this is the greatest economy in the HISTORY of America and the best time EVER to look for a job!” he tweeted Monday afternoon. Speaking in the White House Rose Garden on Wednesday, he repeated that this is the “strongest economy we’ve ever had.”
Indeed, the economy has made major progress since the Great Recession ended in 2009, and that improvement has continued -- and even strengthened by some metrics -- during Trump’s 16 months in office. Jobless rates among minorities are at or near record lows, openings are at an all-time high and there are more positions available than there are unemployed.
Yet wage growth is moderate, productivity remains tepid and expansion has averaged 2.4 percent on a year-over-year basis since Trump took office, well below the 4.4 percent of the 1950s and 1960s.
“If you want to go back to the golden years, I suggest you go back to a year like 1955,” said Robert Gordon, a Northwestern University economist and author of the book “The Rise and Fall of American Growth.” Dwight D. Eisenhower was president that year. The post-World War II period, up until 1972, “brought sustained increases in the standard of living that are completely different from what we have today.”
Greatest Growth
For starters, labeling a single economic era as the greatest in history is subjective because there’s no agreed-upon metric.
Judging solely by gross domestic product, perhaps the simplest way to gauge a nation’s progress, the decades that followed World War II were the hottest in American history. Pent-up consumer demand, a housing boom and a vibrant manufacturing sector all melded into the economy’s Golden Age. By the GDP yardstick, the current pace of the expansion pales in comparison.
That said, Trump seems to be focusing on the labor market, which continues to flex its muscle. There are more job openings than unemployed workers for the first time ever, though that figure comes from data that only stretches back to 2000. A longer-run estimate suggests that the ratio of jobless to opportunities is at its lowest in almost five decades.
Unemployment rates are also at or near the lowest on record for black, Asian and Hispanic workers -- a fact Trump has highlighted.
Still, the overall jobless rate -- 3.8 percent in May -- has been lower in the past, dipping below 3 percent during the 1950s. The time it takes unemployed people to find work also remains elevated. And while wage growth has slowly picked up, past expansions have seen much bigger gains. That’s true even after accounting for today’s modest inflation.