The document provides an overview of key economic indicators under President Trump such as jobs, wages, GDP growth, budget deficits, trade, and other measures. It notes that monthly job growth has been similar under Trump and Obama, while real wage growth has slowed and real GDP growth exceeded 4% in the second quarter of 2018 due to tax cuts and spending increases but is projected to decline. It also discusses the increased budget deficits and debt resulting from the Trump tax cuts.

1. 1
August 2018
Understanding the
Trump Economy
Monthly Job Creation

2. Topics
2
1. Jobs and Employment
2. Wages and Inflation
3. GDP Growth
4. Budget Deficits & Debt
5. Trade
6. Other Measures

3. Monthly Job Creation
3
 Net job creation (non-farm payrolls)
is perhaps the best overall measure
of how the economy is doing
 Monthly job creation averaged
194,000 for Trump in his first 19
months, vs. 205,000 in Obama’s last
19 months.
Source: NYT “Trump’s Economic Claims
Are Overblown” (August 3, 2018)

4. The Total Number of Jobs Regained its 2007 Peak by May 2014
4
July 2018
149.1 million total
May ‘14 Jan ‘17Private is 127m jobs; Govt is 22m jobs
This figure shows the total number of non-farm payroll jobs in the economy
The total changes based on the monthly change in the previous slide
Note how consistently the line has risen since 2010
Number of jobs recovered to 2007 peak by May 2014
Trump was inaugurated in January 2017

5. Unemployment Rates Have Fallen Consistently Since 2010
5
7.5%
July ‘18
3.9%
U-3
U-6
 U-3 is the commonly reported rate in the news
 U-6 is a wider rate with additional persons
 U-3 recovered to pre-recession levels by May
2016; U6 by May 2017

6. For All Races, U3 Unemployment Rates Have Fallen Since 2010 or 2011
6
July
2018
3.9%
Overall rate

7. Topics
7
1. Jobs and Employment
2. Wages and Inflation
3. GDP Growth
4. Budget Deficits & Debt
5. Trade
6. Other Measures

8. Real (Inflation-Adjusted) Hourly Earnings Growth Rate (%)
8
Source: NYT “Trump’s Economic Claims Are Overblown” (August 3, 2018)
 Real wage growth averaged
0.8% under Obama (2009-2016)
vs. 0.3% for Trump (2017-2018)
 Real wage growth turned
negative in June and July 2018,
as gas prices drove inflation
faster than wage growth

9. Topics
9
1. Jobs and Employment
2. Wages and Inflation
3. GDP Growth
4. Budget Deficits & Debt
5. Trade
6. Other Measures

10. Real GDP Growth (Full Year)
10
2.2%
1.6%
2.9%
2.5%
1.8%
2.2%
 Real gross domestic product (GDP) growth is a measure of national production and income
 Trump’s first year in office was 2017
 Measured for the full year, GDP growth in 2017 was higher than 2016, but below 2014 and 2015.
*Real means adjusted for inflation. This is the number commonly reported in the news.

11. Real GDP Growth (Quarterly)
11
 Real GDP growth was 4.1% in Q2 2018, the best since Q3 2014
 There were four Obama quarters higher than 4.1% GDP growth
*Real means adjusted for inflation. This is the number commonly reported in the news.
5.1% 4.9%
4.1%
4.7%4.5%

12. What Contributed to the 4.1% Growth Figure in Q2 2018?
12
CRFB: “Growth just hit
4.1% - Don’t Expect it to
Last” (July 27, 2018)
 Trump has increased spending
and cut taxes, contributing
about a 0.8% boost to the
growth rate in Q2 2018
 Concern about trade wars
caused a spike in exports to
beat tariff imposition dates,
contributing 0.6%.
 Excluding these factors,
growth would have been
about 2.7%.

13.  Historically, economy has grown faster under Democratic Presidents
 Economy under Carter grew faster than Reagan’s first term, but not
his second
 Economy grew faster under Clinton than Reagan
 Economy grew about same pace under Obama as G.W. Bush around
1.8% (including both terms; Obama’s not shown)
 Much of G.W. Bush growth was a bubble (ex-bubble was about 1.0-
1.2% growth)
Source: The Economist: “Timing is Everything-Presidents and Growth” (August 2014)
Real GDP Growth Faster Under Democratic Presidents Historically
13

14. Topics
14
1. Jobs and Employment
2. Wages and Inflation
3. GDP Growth
4. Budget Deficits & Debt
5. Trade
6. Other Measures

15. Federal Budget Deficit % GDP (1968-2028)
15
Budget deficits jumped during
the Great Recession and steadily
fell back to below historical
average by 2014.
The largest deficit year (FY 2009)
was budgeted by President Bush
and was mainly driven by
revenue declines and spending
for unemployment compensation
and food stamps, not Obama
policy.
Obama kept spending flat at
about $3.5 trillion from FY2010-
2015, while revenues recovered,
thus lowering the deficit. He also
raised taxes on the top 1% in
2013 with the partial expiration
of the Bush tax cuts.
Deficits average about 5% GDP
2018-2028, or $1.2 trillion per
year.
CBO “Budget & Economic Outlook 2018-2028” (April 2018)

16. Trump Tax Cuts Significantly Increase the Annual Deficit and Debt (Sum of Deficits)
16
 Trump inherited a $9.4 trillion debt increase trajectory over the 2018-2027 period (CBO January 2017 baseline). This is a forecast of the
sum of the annual deficits for those years. It assumes laws on the books as of that time were to continue (i.e., before any changes).
 CBO estimated in April 2018 that the Trump Tax Cuts will add about $2.3 trillion to the debt trajectory over 10 years (table B-3, below).
 This changes the trajectory to $11.7 trillion ($9.4 + $2.3 = $11.7). It assumes the tax cuts expire for individuals in 2025, which is unlikely.
 The alternate scenario, presented on the next page, assumes the tax cuts and other current policies are extended, increasing the impact of
Trump’s economic policies (tax cuts and spending) on the debt trajectory to $4.3 trillion, so the new trajectory is $9.4 + $4.3 = $13.7 trillion.
CBO “Budget & Economic Outlook 2018-2028” (April 2018)

17. Federal Budget Deficit Forecasts for 2018-2027 ($ Billions)
CBO January 2017 Baseline (Obama) vs. April 2018 Alternate (Trump)
487
601 684
797
959 1,000 1,027
1,165
1,297
1,408
318
380
421
470
490 473 441
437
385
443
-
200
400
600
800
1,000
1,200
1,400
1,600
1,800
2,000
2018 2019 2020 2021 2022 2023 2024 2025 2026 2027
$9.4 trillion total
CBO January
2017 Baseline
$4.3 trillion additions
due to Trump’s tax cuts
and spending increases,
if current policy
extended
+45% vs. January 2017
baseline (+$34,000 per
household)
5x Obama 2009
Stimulus Plan (ARRA)
Source: CBO “Budget & Economic Outlook” (January 2017 and April 2018) 17
$13.7 trillion total additionsTrump inherited a $9.4 trillion debt increase trajectory over 10 years.
He has since turned that into $13.7 trillion, a 45% increase.

18. NYT: Paul Krugman “Trump, Tariffs, Tofu and Tax Cuts” (July 9, 2018)
Krugman: “Corporations have gotten a really big tax cut: The tax take on corporate profits
has fallen off a cliff since the tax cut was enacted. But they’re using the extra money for stock
buybacks and higher dividends, not investment.”
2013 2018
Trump Tax Cuts: Federal Corporate Income Tax Receipts ($ Billion)
18

19. Trump Tax Cuts: Distributional Impact by Income Group
19
 CBO estimated that most lower income brackets will incur a net cost from the Trump Tax Cuts, as healthcare subsidies
are reduced to millions of persons losing health insurance.
 About 4 million persons lost health insurance from 2016 to 2018, so subsidies flowing to those families were cut
 Higher income brackets get a sizable tax cut
 The bottom 60% are expected to get 17% of the benefit of the tax cut, worsening income inequality
 Most middle class families incur costs after 2025, if the individual cuts expire on schedule. This is because the formula
for how fast the tax brackets rise with inflation was changed, so the brackets rise more slowly, a subtle tax increase
Sources:
 CBO “Distributional Effects of Changes in
Taxes and Spending under the Conference
Agreement for HR 1” (December 2017)
 Joint Committee on Taxation JCX58-
”Distributional Effects of the TCJA”
(November 2017)

20. Topics
20
1. Jobs and Employment
2. Wages and Inflation
3. GDP Growth
4. Budget Deficits & Debt
5. Trade
6. Other Measures

21. Economists Overwhelmingly Agree: Tariffs Hurt America Overall (March ‘18)
21

22. “So when a tariff drives up the price of
imports to consumers, leading them to
buy fewer imported goods, the welfare
loss will be roughly:
Loss = fall in imports * ½ tariff rate”
Krugman estimates 2-3% GDP loss with a
major trade war, if we had tariffs of 40%
and a 70% decline in trade
Significant employment disruption (11
million employed in export industries)
Krugman: Effect of Higher Trade Barriers
22NYT: Paul Krugman “Thinking About a Trade War” (June 2018)

23. How Trade Increases Output/GDP
23Peterson Institute for International Economics: Bradford, Grieco, and Hufbauer- “The Payoff to America from Global Integration” (2005)

24. Topics
24
1. Jobs and Employment
2. Wages and Inflation
3. GDP Growth
4. Budget Deficits & Debt
5. Trade
6. Other Measures

25. Stocks: Bull Market Since 2009
25
 The stock market has been increasing
since March 2009 without a 20%
decline
 The top 1% wealthiest own about 40%
of stock market value
 The top 10% wealthiest own about 81%
 The bottom 80% own 8%
 The bottom 50% have no direct or
indirect stock ownership
NYT: “Bull Market Hits a Milestone: 3,453
Days. Most Americans Aren’t at the Party.”
(August 22, 2018)
NPR: “While Trump Touts Stock
Market, Many Americans Are Left Out
Of The Conversation” (March 1, 2017)

26. U.S. Household Net Worth Hit $100 Trillion in Q1 2018
26
 Net worth reflects stock market (financial assets) and home equity
 The globalized free trade system has been a massive wealth generator, but the gains were unequally distributed
 Real (inflation-adjusted) household net worth has increased 2.5x since 1990
 $100 trillion is about $800,000 per family if split evenly
 Median (50th percentile family) had $100,000 net worth in 2016
 The top 1% owns about 40% of this wealth, vs. 25% in the pre-Reagan era
Real Net Worth
(2018 $)
Q1 2018
$100.7
trillion