What a difference three days make.
During Tuesday’s State of the Union address, President Donald Trump gleefully boasted that, thanks to the confidence he has instilled in businesses, the stock market was reaching heights never before seen. “[It’s] smashed one record after another, gaining $8 trillion in value,” Trump said. “That is great news for Americans’ 401(k), retirement, pension and college saving accounts.”
Friday, however, the Dow was making headlines for completely different reasons. The stock market plunged by nearly 700 points, or roughly 2.5 percent, capping off its worst week in two years. In total, the Dow lost 4.1 percent of its value this week, including 362 points on the day Trump was giving his State of the Union address. There are several factors behind the drop, one of which being the latest U.S. jobs report showing an increase in jobs and workers’ wages — good news for Main Street that succeeded in freaking Wall Street out.
Trump, naturally, loves to talk about the stock market — namely, to claim credit when it’s doing well. Search on Twitter for “Trump” and “stock market” and you’ll find dozens of results, mostly congratulating himself for record stock market numbers.
Furthermore, despite Trump’s claims that stock market growth was helping ordinary Americans with their retirement and college savings, research shows that just over half (52 percent) of Americans own stocks. This sounds reasonable until you realize its the lowest number since Gallup began tracking the numbers 19 years ago. Among Americans making $30,000 to $75,000 a year, the number invested in the stock market fell by 22 percent from 2007 to 2016.
Analysts are also understandably weary of the idea that Trump is at all responsible for the record stock market growth in the last year, and was instead a continuation of long-term trends set in motion by the federal reserve. “This is still the same rally that we’ve been in for the better part of the past eight or nine years,” economist David Rossenberg told CNBC earlier this month. “It still has the Fed’s thumbprints written all over it.”
There’s also the fact that, as MSNBC’s Chris Hayes helpfully pointed out, there is a difference between the stock market’s health and the economy’s health. While the Dow may have surged in wake of the GOP’s corporate-friendly tax cuts, many ordinary Americans are still struggling to get by. Inequality is greater than ever, while the black unemployment rate — which Trump also touted in the State of the Union address — has now increased from 6.8 percent to 7.8 percent.