Before we get into the data and try to answer this question, it should be known that this is a classic case of correlation versus causation. To attribute a healthy economy solely to whoever is the sitting president is a bit too simplistic.
There are the other factors involved – The Federal Reserve, interest rate changes, the level of motivation of an economy’s citizens, etc. I’m no economist, but as a data analyst I do know that the truth is rarely that simple.
What are the primary economic KPI’s?
As with any company, we need some key performance indicators to measure our economy’s success.
Generally, GDP and unemployment are commonly used metrics, so let’s go with that. Some people like to use the stock market as a leading indicator, but that’s not a reliable metric. Markets can be manipulated via quantitative easing and deceptive trades, and are susceptible to false positives (bubbles). (R)
It’s good to look at high-quality source data to answer this question, and not just some data that CNN or Fox News put together (no, I don’t trust either one). I’ll be looking at data from places like the Bureau of Economic Analysis and World Bank.
There are too many memes and graphics circulating that are misleading and highly biased. This one, for instance:
There’s a lot of problems with this:
- How are these numbers measured? GDP is usually measured in quarterly growth. Are these numbers averaged over the course of each president’s entire term, or sampled from one particular quarter in their term?
- If the numbers were sampled from one quarter in their term, which quarter did they pick? Did the same amount of time pass for each term before measuring? For instance, did they measure from the 2nd quarter into Obama’s term, but the 10th quarter into Trump’s?
- This meme was created and distributed by Turning Point USA, which is a heavily right-leaning political organization, and immediately makes me suspect of the meme’s accuracy and bias.
The problem is that some Trump-supporters pretty much automatically accept memes like this because of their own confirmation bias and tribalism.
But, it’s human nature to find evidence to justify our decisions – in this case, who we voted for. We’re all prone to these biases and it happens on both sides.
The actual data paints a different picture, which I’ll get into now.
What does the data actually say?
Let’s start with GDP. A quick Google search pops up with this:
The main thing to notice here: GDP growth is pretty stable, no matter who is president. The trendline through Trump, Obama, Bush and even Clinton are all about as steep. You can also see the downward bump because of the ‘08 recession.
Here’s an interesting one. This is quarterly GDP from 2007 to now.
Some people, including the meme I mentioned earlier, argue that Trump has gotten us 4.1% GDP growth and Obama only got us 1.6% – which is false.
There were four separate quarters under Obama where GDP grew over 4.1%.
BUT, you’ll notice that GDP growth does seem more stable under Trump. See all the fluctuations under Obama, with some quarters with negative growth? There’s none of that after 2016. Whoa.
This brings me to the conservative argument that Obama slowed down our recovery after the recession.
There is some unemployment data that shows otherwise, but conservatives may be onto something when it comes to GDP, based on the above data.
Just for kicks, I threw the data into Excel so I could see average GDP growth per president. Here’s what I found:
Double whoa. I know analysts don’t like using averages because they hide outliers and fluctuations, but in this case I think comparing two averages is telling.
Now, I can’t say with confidence whether GDP has stabilized because of Trump, or just because recession recoveries are naturally unstable for a while (no matter who is president), or something else entirely. But that does warrant more research, for sure.
Ok, so since GDP was clear as mud, let’s move on to unemployment numbers.
Again plotting this in Excel, it’s fairly easy to see that the trendline of unemployment improved pretty consistently since 2010. If anything, unemployment improved faster under Obama. But unemployment under Trump is still phenomenal.
But as far as the claim that Trump sped up our recovery – the unemployment and GDP data doesn’t seem to verify that – two of the most important economic metrics.
Conclusion: So who gets the credit?
Neither. Or both. The data is a bit inconclusive. Unemployment improved faster under Obama, and GDP is more stable under Trump.
Of course, this article isn’t a complete picture, and I’d be interested to do more research.
I suppose the point is that we can’t take things at face value. We should be more aware of our biases, more willing to be wrong, more aware of how nuanced the truth can be. Our political divide has gotten pretty severe, and maybe a little humility could go a long way.