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23 April 2018 00:00:00 AM Breaking News

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Trump's Economic Scorecard: One Year Since Inauguration

This Saturday is the one year anniversary of President Donald Trump’s election. Over the past year, the stock market has boomed, GDP growth has improved and unemployment is at an almost 17-year low. However, job gains were lower than any of the past six years and wage growth was less than last year.

President Trump inherited an economy that was on a good trajectory with solid job growth and low unemployment. Trump's own mark on the economy will be based on the long-term impact of his new tax laws.

The biggest economic questions going forward are how much growth will tax reform generate, and what will Trump do with various trade agreements such as NAFTA? These could determine what happens to the U.S. economy and the stock markets over the next few years.

We have developed a publicly available Google document, which tracks over 100 indicators to help evaluate the progress and potential of “Make America Great Again.”

Below are a few of those indicators I think are worth highlighting.

Design: Nick DeSantis, Forbes Staff

The Trump stock market rally remains strong

Stock market averages hit dozens of new highs in 2017 and have continued to do so this year. Besides the tax reform bill passing, worldwide economic growth and higher company earnings are driving the markets. Two of the biggest risks for rising markets are Trump's plan for trade, and central banks' decisions on interest rates and balance sheets.

To keep these market returns in perspective, Obama’s first-year stock market returns were also strong. Trump’s Dow 30 increase of 25.1% beat Obama’s 18.8%, but when looking at the broader S&P 500, Obama’s 23.5% bested Trump’s 19.4%.

Of course, tying the success of a president to stock market performance is a risky move for any White House.

Design: Nick DeSantis, Forbes Staff

GDP growth helped by higher inventories and trade

GDP growth was 3.0% and 3.1% on an annualized basis for the June and September quarters, respectively, but an increase in inventory and better trade helped. When viewed on a year-to-year basis for the past four quarters, growth was 2.3%.

Design: Nick DeSantis, Forbes Staff

Unemployment rate continued its downward trend

The unemployment rate peaked at 10.0% in October 2009 and has been on a downward trajectory since then. 2017 was the eighth year in a row that it has fallen.

Design: Nick DeSantis, Forbes Staff

2017 job gains were less than any of Obama’s last six years

There were 2.06 million jobs created last year, which was lower than any of Obama’s last six years. Prior to then, the economy was either in or at the initial stages of recovering from the Great Recession.

Design: Nick DeSantis, Forbes Staff

Hourly wages

The 2.5% hourly wage rate growth was a bit less than 2016’s 2.9% and mirrored 2015’s. While a good number of companies are handing out bonuses due to the tax reform bill passing (or maybe having to pay up to keep employees from leaving), the key test to the package’s impact will be in wage growth over a few years time frame.

Design: Nick DeSantis, Forbes Staff

Manufacturing jobs

Manufacturing job growth bounced back to the levels seen in 2011 and 2014. However, if wages rise too much companies could invest in automation, which would keep large increases in check.

Design: Nick DeSantis, Forbes Staff

Coal jobs

There were 800 coal jobs added in 2017. If natural gas prices remain low and the alternative energy industry continues to grow (and it employs more people than the coal industry), a significant rebound in coal jobs is not in the cards. This remains a very small industry when you consider that there are only 50,500 coal miners.

Design: Nick DeSantis, Forbes Staff

Federal deficit

Similar to the unemployment rate, the federal deficit reached a peak in 2009 and started a downward trend until 2015. However, it increased in 2016 and is expected to continue to grow due to the tax bill passing.

Design: Nick DeSantis, Forbes Staff

Trade deficit

The trade deficit rose to a level that it hasn’t been at since 2008. One probable explanation is the United States' continued economic growth, which allows consumers to buy more overseas goods. This could put more pressure on Trump to fulfill at least some of his tougher campaign trade promises.

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