The healthy state of the U.S. economy should significantly strengthen Donald Trump’s chances of being re-elected next year, if the expansion holds for another 12 months.
As controversial and divisive as the president has been, it would be highly unusual for an incumbent to lose when the economy is doing so well. Most people vote according to their pocketbooks. When they feel good about their own financial condition, they stick with whoever is in the White House.
Because Mississippi’s recovery has been sluggish, it’s easy to miss what’s been going on in most of the rest of the country. A recent recap from The Associated Press, though, illustrates a lot of areas about which Trump can boast in his run for re-election. Namely:
• Despite the fear that robotics and automation would create a permanent joblessness, that hasn’t happened. The decadelong expansion since the Great Recession ended in June 2009 has created 21.4 million jobs. That’s more than made up for the 9 million jobs lost during the severe downturn. As a result, the nation’s current jobless rate of 3.6 percent — down from its 10 percent peak a decade ago — is the lowest since 1969.
• Although the economy’s expansion has been less robust than what’s typical after a recession — growing 2.3 percent a year rather than the more usual 3.5 to 4 percent — that’s not been such a bad thing. Since it has not had to worry about the economy overheating and spurring inflation, the Federal Reserve has kept interest rates at historically low levels — about 4 percentage points below what they were at the end of an expansion in the 1990s. That’s made it easier for people to finance cars and houses.
• For all the talk among Democrats about wealth disparity, wages actually have risen the fastest recently for those at the bottom of the earnings ladder. In May, for example, the Federal Reserve Bank of Atlanta reported that the poorest one-quarter of workers saw their wages jump 4.4 percent from a year earlier, besting the 3.2 percent increase experienced by the richest quarter of workers.
All of this adds up to a good economic record to run on if, as we said earlier, it holds.
You only have to turn back the clock three decades, however, to see how far an incumbent’s fortunes can fall if the economy goes south.
George H.W. Bush, after America’s quick victory in the first Persian Gulf War, had a stratospheric 89 percent approval rating in March 1991. Fifteen months later it had sunk to a dismal 29 percent, largely because of concerns about the weak economy and its high unemployment rate.
Even though the recovery was underway before Bush’s loss in 1992 to Bill Clinton, it came too late and too modestly for the voters to notice.
Thus, Trump can be encouraged by the economy but not overly confident. Today’s boom could turn into tomorrow’s bust.
The economy runs in cycles, and with it the fortunes of politicians.