President Trump’s time in the White House ended yesterday and so it seems an appropriate time to start looking at some of the economic data at the conclusion of this time. I grabbed two data series, US Nonfarm employment and US private employment from January 2017 to December 2020. The two series look pretty much identical in terms of shape, though obviously there is a bit of a scale difference. So let’s look at the pictures.
Let’s deal with the numbers first and then discuss some cause and effect. The fact is that nonfarm employment in December 2020 is slightly more than 3 million lower than when President Trump took over in January 2021. Also the private sector employment is over 2 million less over the same time period. These represent a 2% decline and a 1.7% decline, respectively.
The growth period continues a straightline trend from the President Obama years and full credit for continuing it. The fact of the matter is the employment numbers end up lower for President Trump than when he started. Clearly the primary cause of the decline is COVID-19 and the economic implications, whether private sector pivots or lockdowns. COVID-19 was not a truly predictable event, though I think the implications of it were, or at least more predictable. One of the biggest misses for President Trump was not figuring out a coherent policy to arrest economic fallout earlier to stop the declines before it got so low.
A further concern is the slowing pace of the increase (recovery) and the possible further downturn resulting. If policy is no longer supporting job recovery you need to look at changes in policy. There is lots of room for disagreement here. There is so much adjustment occurring at once that it is difficult to distinguish signal from noise. Businesses made changes in response to changes in demand and in labor availability, while people (workers) made changes as a result of the changes in family and work situations.
Are there easy policy options here? No. Not really. Even with less than optimal policy choices (economic policy is a poor option when the source of the economic issue is from public health) a consistency of policy approach would help here. If the choice is to support consumers, consistently support them. Certainly do not leave them wondering if there will be one-time support or continuing support. Consistency in terms of public health responses would obviously be an important approach here too.
We end the page on the time of President Trump and now turn to President Biden and see what will happen with the employment situation and economic policy.