Tuesday, July 17, 2018
Business

PolitiFact: Trump's claim about weak economic growth under President Obama rates Mostly True

The statement

Says President Barack Obama "is the first president in modern history not to have a single year of 3 percent growth."

Donald Trump, Oct. 28 in a campaign speech

The ruling

When Trump talked of growth, he likely meant the percent change in gross domestic product, called GDP, which is the total value of goods and services in the country. The time frame he's using is indistinct, but "a single year" probably relates to the annual change in GDP.

Looking at the economic statistics under those guidelines, Trump would be correct. But the comparison he's making about Obama provides a narrow view of the economy.

"I suppose he's using year-over-year data, with which the claim is true, but misleading," Princeton economist Alan Blinder told PolitiFact Florida. Blinder and another Princeton economics professor, David Watson, examined GDP growth during presidential administrations in a July 2014 study.

There are any number of historical vagaries that color what affects GDP during any administration, Obama's included. Obama has overseen the country climbing out of a historical recession that left the housing market depressed, wages low and businesses wary of investing. He has also had a Congress that has largely pushed an austerity agenda against his wishes. And global crises like instability in the Middle East and slowed growth in China and Europe have lowered demand for U.S. products and pushed the dollar higher.

"The fact that the economy has steadily improved is actually fairly remarkable, considering what else has been happening," said Christian Weller, a University of Massachusetts at Boston public policy professor and a fellow at the left-leaning Center for American Progress.

Annual figures on GDP growth date to 1929, and often are used to back up the same talking point on conservative media outlets that Obama has not had a full calendar year of aggregate GDP growth of at least 3 percent.

U.S. Bureau of Economic Analysis data show Herbert Hoover, who was inaugurated in March 1929 and left office in March 1933, was the last president to have this distinction. Hoover presided over an economy mired in the Great Depression that shrank during his term.

Every president since then has seen at least one calendar year with annual GDP growth of at least 3 percent. The best average growth in a single calendar year under Obama is 2.6 percent in 2015, and never 3 percent or more. No president has experienced that since Hoover.

But experts said Trump's use of "modern history" is vague, and using the annual change in GDP is perhaps not the best measure. The best data go back to 1947, when the federal government started tracking GDP by quarter.

That would give a more nuanced picture of the data — the economy in the first quarter of a presidency is often attributed to the preceding administration, for example. It also would coincide with the historical boom in the nation's economy after World War II.

Going by quarters, growth within a year was higher than 3 percent during two periods during Obama's presidency, Blinder said. Between the third quarters of 2009 and 2010, GDP growth was 3.4 percent. From the first quarter of 2014 and of 2015, it was 3.3 percent.

Overall growth rates for several administrations have exceeded 3 percent, but Weller said context is important.

Without complete data for 2016, the average growth rate during Obama's two terms was 2 percent, Weller said. That was on par with George H.W. Bush's term and faster than George W. Bush's average.

We rate the statement Mostly True.

Edited for print. Read the full version at PolitiFact.com.

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