UNITED STATES (OBSERVATORY NEWS) — After getting rid of the threat of isolation, US President Donald Trump has vigorously entered his election campaign, reinforced by an important piece of good US economic performance.
Trump came to power after the economy improved, while his predecessor Barack Obama took over when the country was mired in recession following the 2008 financial crisis.
However, the American administration knew how to take advantage of the favorable circumstance and the confidence of consumers who continue to consume what fuels growth.
Work, unemployment, wages
“Jobs are growing and wages are rising,” Trump said in his State of the Union address.
The pattern of job creation during Trump’s term can be compared to the last two years of Obama. The American economy created 183,000 jobs in 2017, 225,000 jobs in 2018, and 175,000 jobs in 2019, compared to 195,000 jobs in 2016 and 226,000 in 2015.
The unemployment rate fell to its lowest level in fifty years to 3.5 percent, compared to 4.7 percent in December 2016.
What is noticeable is the significant decline in unemployment among Hispanics and black Americans since Trump assumed the presidency, despite its much higher survival rate than white Americans.
In this context, the unemployment rate among African Americans has decreased from 7.8 percent in December 2016 to 5.9 percent in December 2019. And from 5 and 9 percent to 4.2 percent among Americans of Spanish descent. Among white Americans, the percentage decreased from 4.3 percent to 3.2 percent.
Meanwhile, Trump’s daughter and counselor Ivanka is working for a greater integration of women into the labor market, at a time when many mothers are excluded from the labor market because of their inability to secure the costly care of their children.
As for wages, they increased by 2.9 percent, but they did not “fly high,” as Trump said.
– the growth –
The US economy has entered its eleventh year of growth in a row, which is a record.
Total output growth was 1.5 percent in 2016, the last years of Obama’s tenure. It reached 2.3 percent in 2017 and 2.9 percent in 2018, the year in which the economy benefited from tax cuts and budget increases, especially in the level of military expenditures.
But it fell to 2.3 percent in 2019 due to a trade war with China that curbed corporate investment.
Although this ratio is considered solid compared to the major developed countries (growth of 1.2 percent, for example, in the euro area), it remains well below the 3 percent promised by Trump.
The US Treasury countered the reason for Boeing, the main shareholder in US exports and its Max 737, which has been banned from flying for nearly a year. Minister Stephen Mnuchin said Thursday that without the Boeing crisis, “I think we would have achieved 3 percent.”
In the election year 2020, the International Monetary Fund expected a new decline in growth to 2 percent, due to the implications of amending the tax law.
The most prominent measure in Trump’s state was the tax amendment adopted by the end of 2017, and was the most important amendment of its kind in 30 years, with the tax on the income of the wealthiest and companies reduced from 35 to 21 percent.
These measures certainly stimulated growth in 2018, but they also led to debt inflation and the budget deficit, which is expected to reach $ 1015 billion at the end of the fiscal year in September, according to Congressional budget services.
The debt ratio is expected to reach 81 percent of gross product in 2020.
The administration is considering a new cut in taxes on the middle classes, a way to spur growth.
– commercial policy –
Trump fulfilled his promise, prior to his election, to renegotiate a free-trade agreement in North America with Mexico and Canada that was described as the “worst treaty” in US history.
On January 29, the three countries reached a new agreement.
He can also boast that, as he promised during his 2016 campaign, he won a trade agreement with China that was signed in mid-January.
“Our strategy succeeded,” Trump said.
But at what cost? The trade war with China and reciprocal punitive duties have plunged factories into recession and slowed American and global growth.
– The stock exchange –
The fact that Trump comes from the business world, confidence in the Wall Street. Its Dow Jones index has grown by about 55 percent since Trump’s election in November 2016. It is another important argument for attracting many Americans, whose pensions are mortgaging the stock market.
This article is written and prepared by our foreign editors writing for OBSERVATORY NEWS from different countries around the world – material edited and published by OBSERVATORY staff in our newsroom.
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