Trump Vs Obama

One of the many claims that President Donald Trump has continually made, is that the U.S. economy is currently the greatest in history. As with much that we hear and read in current times we need to ask ourselves, is this really the case?

What is indisputable is that the stock market is within 5% of its all-time high. Seemingly a positive for the merits of Trump. However, this was also the case almost 2 years ago, in January of 2018, when the market was actually slightly higher than it is now. So zero market returns for the last two years. Although the markets did initially rise immediately after Trump's inauguration, stimulated by tax cuts (or just a follow-on from the Obama administration?).

So what above the overall strength of the U.S economy? Yes, things do look positive right now, and unemployment is at 50 year lows, but there have been times when the economy has been even stronger.

Trump has also claimed that “wages are rising, and incomes are soaring”. Partially, but not completely true.

 

Average hourly earnings have increased since the beginning of Trump’s tenure, but this could be argued to simply be a continued trend that started under Obama. In fact recently this trend has started to reverse and we have seen real wages decrease slightly over the past couple of months.

What does this all tell us? That the U.S. economy is indeed in pretty good health, but likely not to the extremes that Trump would have us believe.

As always take everything you read with a pinch of salt and gather your information from as many different sources as you can.

Buy good companies and stay invested for the long term.

Current GIC rates*

*Oct 4th 2019

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