e learned last week that the economy had added 1.4 million jobs in August, meaning the economy had recovered nearly half of all jobs lost during the pandemic. Before August the economy added a combined 9.4 million jobs from May through July.
Treasury Secretary Steve Mnuchin said on Fox News Sunday that President Trump “couldn’t be more pleased” with the progress of the recovery so far, and said that some are predicting 30-35% GDP growth in the third quarter.
One thing is for sure: that the economic recovery from the pandemic is happening faster than economists expected regardless of their political affiliation. Every single month since April the unemployment rate has come in lower than analysts expected.
In May, analysts surveyed by the Wall Street Journal predicted that unemployment would skyrocket to 19.5%. Instead, it fell to 13.3%.
In June and July, the economy also performed significantly better than analysts predicted. And again this past week, when analysts forecast the August unemployment rate would come in at 9.8%, it instead fell to 8.4%, nearly a point-and-a-half lower than predictions.
Indeed the United States has not just beaten the forecasts every month, it has also economically outperformed nearly every industrialized country in the world so far, both in jobs recovered and GDP. Looking at the slowness of the Obama recovery, there is a strong case to be made that the Republican’s 2017 business tax cuts and the Trump administration’s aggressive program of deregulation has put the economy in a position to recover as quickly as it has. It’s worth noting that Biden and congressional Democrats say the first thing they will do if they win this fall will be to reverse those tax cuts.
In contrast with Obama’s stimulus package, the Trump Administration’s main relief effort instead gave money directly to families and workers who had no jobs to go to due to the shutdowns. And when the states began to open back up, Trump wisely did not fall into the trap of continuing to pay for expanded unemployment, instead offering a decreased amount to incentivize workers to go back to work.
Of course, none of this is to pretend that 8.4% unemployment is desirable, but to point out that given the garbage hand China dealt the world, we’re playing the best with it.
Obama notably presided over the slowest economic recovery from any recession since the Great Depression, and his stimulus package didn’t even live up to his own administration’s expectations. The unemployment rate under Obama surpassed the levels he warned we’d see if we didn’t pass his stimulus, and it wasn’t until the end of 2014 that the unemployment rate would be where the White House predicted it would be with stimulus by 2012.
President Trump’s economy, meanwhile, is recovering from a much more severe contraction than Obama experienced at an even faster pace.