Trump Boom: Unemployment Lowest in 10 Years

The economy gave out a medium-sized roar on Friday, when the federal government announced unemployment dropped to 4.4 percent.

The nation also added 211,000 jobs in April. The unemployment rate was 4.5 percent in March.

“During the Obama years, growth was an abysmal 1.9 percent, which the Congressional Budget Office now says is the course we are on for decades to come.”

It’s a sign businesses and investors have enough confidence in the economy to be creating new jobs and hiring. The optimism comes as the White House promises tax reform, and Republicans continue to press for a partial repeal of the Affordable Care Act. President Donald Trump’s focus on deregulation, energy expansion and plans for tax reform might also be having a psychological effect on growth, planning, and consumer confidence.

But it won’t be enough for Trump’s economic plans to take off.

“The point of the Trump tax cut is to get more jobs and higher wages,” wrote Stephen Moore, one of the Trump campaign’s economic advisers, in a recent column in Investor’s Business Daily. “America needs real and sustained growth of 3 percent or 4 percent.”

Moore and others believe the need is urgent because of the time it took — and is still taking in some parts of America — to get back to pre-recession levels on key indicators such as employment, housing-market health, and more.

For the economy to take 10 years to hit 4.4 percent unemployment is a bad sign that something is amiss. The nation suffered a “lost decade,” similar to the one Japan suffered, after the Great Recession. Normally, full recoveries from a recession do not take a decade.

But after the Great Recession, the nation elected President Barack Obama and gave Democrats strong majorities in the House and Senate. They passed a quick “stimulus” of about $800 billion but then took their eyes off the ball.

Obama and Democrats focused on passing a major health care overhaul. In March 2010, shortly after the nation’s joblessness peaked at 10 percent, Obama signed Obamacare into law. But instead of getting back to business, the nation’s economy struggled to recover during the Obama years.

Obama was re-elected despite a 7.7 percent unemployment rate, and despite the fact that many U.S. counties still had not recovered fully from the recession.

Now the unemployment rate is the lowest since May 2007’s 4.4 percent. Some economic experts believe that Obamacare, as well as a general inattention to economic matters, led to the anemic recovery from mid-2009 through the end of Obama’s final term.

“During the Obama years, growth was an abysmal 1.9 percent, which the Congressional Budget Office now says is the course we are on for decades to come,” Moore wrote. “Nonsense. This 1.9 percent growth scenario is one-third below the historical average for the U.S. economy from 1950 to 2000, which was 3.4 percent.”

Moore agrees with Harvard University’s Professor Robert Barro that the average annual growth rate for the last century has been about 3.2 percent, where Trump wants to return it.

Low unemployment isn’t the only goal for the White House. American wages have been stagnant for decades, going back to 1979.

Trump believes wages could rise if trade was better enforced, industry was encouraged, and a crackdown on illegal immigration took place.

Moore wrote that reforming taxes would also stimulate wages.

“The Tax Foundation and others predict that tax reform alone would raise wages and business investment by about 9 percent over just the next decade,” Moore wrote. “Any short-term revenue losses from the tax cuts would be inconsequential compared with the positive fiscal benefits over five, 10 and 20 years on a higher-growth trajectory.”

Still, the current picture seems to have impressed even The New York Times.

“The momentum in the job market is really impressive,” said Jason Furman, the chief economic adviser during the Obama administration, to The Times. “I’m frankly surprised that this late into an expansion, the economy is still adding jobs well above the steady-state pace.”

Yet the expansion since the recession ended, in the summer of 2009, has not been a good one for many Americans. Wages need to be improved, tax reform needs to happen, and what the Democrats did to the economy needs to be fixed, because recoveries from recession have not been as quick or as robust as they were in the 1980s and 1990s.