Countdown 70 Day Election

California 40 days until early voting

FOR TRUMP, IT’S THE ECONOMY   

Trump during the convention will be zeroing in on  his performance on the economy prior to the pandemic. His minions will say how great it was, and how it can be again; the greatest and best economy ever.  Unfortunately Donald the stock markets are not the economy.

Having the greatest number of jobs ever created in one month is true, however only after the virus had decimated employment in the prior months.  The Bureau of Labor Statistics (BLS) data does not support Trump’s claims for the period prior to the pandemic.

 Travel and hospitality jobs are not coming back anytime soon. 40% of all Black owned small businesses have failed.  Farm foreclosures are at an all time high.  The service industry was bloated for years with 10% more service jobs per capita than any other developed country.  We are a service economy and as a result the job situation high unemployment numbers will linger even after the virus dissipates. There has been a 52% increase in bankruptcies year over year according to the Fed.

Will there be a recovery as Trump’s associates claim?  Currently there is a moratorium on evictions, small businesses are shuttering their doors and those that have remained opened have not paid rent or full rent for months.  Homeowners that had 2 incomes now may only have one, due to school closures some must stay at home.  Big stores in malls that have shuttered and filing for bankruptcy.  Landlords and larger property owners and investors are not getting their money.  While on-line sales are booming.  There is a reason Warren Buffett got rid of his bank stocks earlier this year, banks hold the mortgage paper. 

Trump will lean heavily during the convention on his record on the economy before the pandemic and what it could look like after.  When looking at employment comparison Trump’s 3 years to Obama’s last 3 years shows Obama averaged 224,000 jobs/month and Trump only averaged 182,000.  Or Obama created 1.5 million more jobs than Trump in 3 years.  Data is derived from the Bureau of Labor Statistics. 

As far as economic growth Trump claims to have the greatest economy ever, however he is 7^th out of the last 11 presidents when using GDP as a measure of economic growth.  GDP growth is similar to that of Obama for the 36 month period.  Under Trump GDP growth fell each of his 3 years.  This after promising his trillion dollar/year debt with a tax cut would pay for itself with economic growth.  How did that voodoo economic policy promise turn out?

The virus created a horrific economic downturn and the administration has been predicting a V shaped quick recovery.  If you look at jobs, the toll of the virus was 22.2 million workers.  Since then only 9.3 million jobs have returned.  The rate of job growth is exactly what Trump said his administration created a record breaking number of jobs with 4.8 million jobs created in June 2020 (back to work after shutdowns).  In July the result was only 1.8 million jobs, quite a slowdown. With another wave the employment picture will get worse not better.  We have only gained 42% of jobs lost to the pandemic. Source is BLS data.

Small businesses started to recover, however since June there has been a downward trend in revenues going to small business. When the stimulus package was issued the V was at the bottom , since the stimulus it recovered to within 10% of the revenues prior to the virus.   In July revenue for small businesses was down 19% that’s a 9% slow down.  Source: Womply via Opportunity Insights Business tracker.

The economy has a long way to go to get where we were at the beginning of the year.  Some economists say it could take years.  Let the facts on the economy tell the real story.