5 things you should know about the Trump economy

Here's what is really going on.

Credit: (Xinhua/Xu Jinquan via Getty Images)
Credit: (Xinhua/Xu Jinquan via Getty Images)

President Donald Trump will give his first official State of the Union address Tuesday night.

And he will, no doubt, tout what he’s seen as one of his biggest accomplishments since he took office: the economy.

“The president is going to talk about how America’s back,” said White House legislative director Marc Short in a call to reporters previewing the president’s remarks.

During Trump’s first maiden appearance at the World Economic Forum at Davos, the president laid out the country is strong economically, and it all has to do with his first year in office.

“After years stagnation the nights is once again experiencing strong economic growth. The stock market is smashing one record after another, and has added more than $7 trillion in new wealth since my election,” Trump said. “Since my election we’ve created 2.4 million jobs and that number is going up very, very substantially […] The world is witnessing the resurgence of a strong and prosperous America.”

From corporate tax bill bonuses to black unemployment, here is what you need to know about the economy before Trump gives his first State of the Union address.

Job growth was slower in 2017 than every year since 2010

During his presidential campaign, Donald Trump promised he’d be the “greatest jobs president God ever created.”  In a tweet last week he claimed his administration’s massive corporate tax cut has created, and will continue to create, “jobs, jobs, jobs!” for Americans.

According to the Bureau of Labor Statistics, 2017 saw 2.06 million jobs created, making the most sluggish job growth in America since Obama’s first term, when the economy was pulling out of the Great Recession.

(Credit: Diana Ofosu)
(Credit: Diana Ofosu)

The anemic job numbers are also an indicator that Trump is misguided in his belief that gutting regulations actually creates jobs.

Corporations are spending less than 1 percent of their tax cut on bonuses

The White House and President Trump have made a big to-do out of the GOP tax bill starting a wave of corporate tax cut bonuses.

Big banks and corporations like AT&T, Comcast, Wal-Mart, and Wells Fargo have announced their plans to deliver bonuses to non-executive employees in light of a massive tax cut courtesy of the GOP tax bill.

Under the new tax law, corporations will be taxed at a rate of 21 percent instead of 35 percent.

But there is more than meets the eye beyond the flashy headlines.

While the bonuses sound impressive, they’re table scraps compared to the total cost of the corporate tax cut. A ThinkProgress analysis of a report from the conservative Americans For Tax Reform group found the bonuses total roughly .1 percent of the trillion dollar corporate tax cut.

Credit: Adam Peck
Credit: Adam Peck

Some corporations, like AT&T and Boeing possibly have sinister motivations for giving out bonuses. Boeing relies on government contracts for much of its business, while AT&T is in pursuit of acquiring Time Warner, a merger which the Justice Department is suing to block. Trump, who previously described the merger as “not good for the country,” received the AT&T news about bonuses before speaking at a White House even celebrating the legislative victory.

AT&T, however, is also in the process of laying off thousands of employees, according to the Communication Workers of America (CWA) union, which represents AT&T workers. CWA filed a lawsuit against the company claiming that some of those layoffs are needless, and that the timing of the terminations — just two weeks before Christmas — represents “an extraordinary act of corporate cruelty.”

Comcast similarly laid off 500 employees before Christmas as well, shortly after promising $1,000 bonuses to 100,000 employees.

GDP growth was lower in 2017 than two of the previous three years

In a speech in front of America’s mayors last week, Trump predicted the final growth quarter would hit around 3 percent, and would only grow from there.

“You take a look at your GDP then and take a look at what’s happened now,” he started. “We’ll have three quarters in a row over 3. We had 3.2, and a lot of people thought it would take two or three years to get there. And we’re going to be hitting 4 soon, and then we’re going to be hitting 5s.”

The fourth quarter GDP growth numbers for 2017 were the final, definitive test as to whether the first year of the Trump presidency produced an economic boom — or “Trump Boom” as Fox News and the conservative Daily Wire describe it. Coming in at just 2.3 percent, the result, while better than the previous year, is lower than two of the previous three years. The United States GDP was 2.6 in 2014, 2.9 percent in 2015, before dipping to 1.5 percent last year.

Black unemployment fell at a slower rate in 2017 than the previous four years

Whenever Trump is questioned about he treats communities of color, he is quick to fall back on one statistic: the black unemployment rate.

During a CNN interview Saturday Night, Van Jones asked musician Jay-Z if it was okay  “to say terrible things but put money in our pockets.”  Jay-Z replied no,”because it’s not about money at the end of the day. Money doesn’t equate to happiness. It doesn’t. That’s missing the whole point. You treat people like human beings. That’s the main point [..] It goes back to the whole thing — ‘treat me really bad and pay me well.’ It’s not going to lead to happiness, it’s going to lead to, again, the same thing. Everyone’s going to be sick.”

Trump responded to Jay-Z via Twitter Sunday morning, again, citing black unemployment numbers.

But President Trump had little to do with this statistic.

As Washington Post reporter Philip Bump noted recently, Trump is taking credit for something he had no part in:

It’s not as if black unemployment was 18 percent under Barack Obama and, as soon as Trump took office, it plummeted. Black unemployment fell fairly consistently from 2010 on, as did the rates for whites and Hispanics.

From January to December 2017, the unemployment rate among black Americans fell 1 percentage point. During the same period in 2016, it fell the same amount. In 2015, it fell 1.9 points. The previous year, it fell 1.5 points. The year before that, it fell 1.8 points

According to the Bureau of Labor Statistics, the unemployment rate for whites is 3.7 percent, almost half the 6.8 percent for black Americans. If Trump truly cared about the economic well-being of black Americans, he would notice the double-difference disparity is a “historic fixture of racial discrimination at play in our national economy,” as ThinkProgress’ Sam Fullwood put it.

The stock market is soaring but wages are stagnant

While the soaring stock market has captured the attention of Trump’s Twitter feed, there is little conversation surrounding wages.

Despite the stock market numbers and low unemployment rate, average hourly earnings grew by only 0.4 percent in 2017, a step backward from 1.8 percent in 2015 and 0.8 percent in 2016.

And for rank-and-file workers the numbers are even more dismal. The average hourly wage of production and non-supervisory workers was $22.30, growing just 4 cents, or 0.17 percent from December of 2016.

Minimum wage workers, meanwhile, have continued to see the federal minimum wage remain at a paltry $7.25 — where it has remained since 2009.