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The Trump economy improves slightly

Rick Newman

The Yahoo Finance Trumponomics report card shows a modest improvement in early July, thanks to strong jobs data for the last couple of months. Trump’s overall grade is a B+, just as it was in the prior reading. But his standing on employment improved by one notch, compared with the six prior presidents we’re judging Trump against.

Our Trumponomics report card compares the economy under Trump with the economy under each president, going back to the 1970s, at the same point in their tenure. (Here’s our complete methodology.) In the prior report card, Trump ranked 4th out of 7 presidents on employment. He now ranks 3rd out of 7, thanks to strong gains in June, when employers added 222,000 new jobs. Job numbers for the prior two months were revised upward as well, for an average of 194,000 jobs per months for the last three months.

Here’s a snapshot of the latest report card:

Source: Yahoo Finance, based on data from Moody’s Analytics

The strong performance of the economy under Trump isn’t necessarily the result of anything Trump himself has done. “The economy’s performing well, but I don’t think it has anything to do with Trumponomics,” Mark Zandi, chief economist for Moody’s Analytics—which is providing the data for the Trumponomics report card—told Yahoo Finance recently. “I can’t think of any economic policy he has accomplished yet.”

Trump’s highest marks come on earnings, which might seem strange, since wage growth has been generally weak. But it was worse for each of the six prior presidents six months into their terms. Wage growth was negative during the first six months of Bill Clinton’s and George H. W. Bush’s first term. It was flat under Reagan, and only slightly positive under Barack Obama, George W. Bush and Jimmy Carter.

Trump has promised, of course, to cut taxes, slash regulations on business and boost infrastructure spending. Such measures, if done right, could modestly help economic growth. But Trump has also threatened tariffs and other protectionist measures, along with new limits on immigration, which would probably spook markets and restrain growth.

The YF Trumponomics Report Card still has no reading for GDP growth, which is a quarterly number that won’t be available until July 28. That number could further boost Trump’s standing, however, since second-quarter growth is expected to be relatively strong following an anemic first quarter. So an improving economy could very well keep the wind at Trump’s back as he fights big legislative battles over health reform, a federal budget and a new limit on issuing federal debt. Even with a strong economy, however, it will be a bumptious summer for Trump.

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Rick Newman is the author of four books, including Rebounders: How Winners Pivot from Setback to Success. Follow him on Twitter: @rickjnewman