Trump’s biggest economic lie of the campaign (so far)

Another reason why the public remains grumpy even though the economic numbers get better and better

Friends,

Before I get to Trump’s biggest economic lie of the campaign so far, let me quickly share with you an effulgence of good economic news.

1. This morning we learned (from the Commerce Department’s Bureau of Economic Analysis) that the U.S. economy grew by a healthy 3.1 percent in 2023 — and by an even faster 3.3. percent in the last three months of the year. (For point of reference, last year’s growth was higher than any year under Trump.)

2. Meanwhile, inflation has fallen from a 40-year high of 9.1% in June 2022 to just 3.4% in December.

3. Unemployment is at 3.7 percent — lower than the long-term average of 5.7 percent.

4. Consumer confidence has surged 29 percent since November. It’s the biggest two-month increase since 1991. The pickup was broad-based, spanning consumers of different age, income, education and geography.

5. Another bit of economic sunshine: Median rents across the country dropped for the eighth month in a row.

It’s rare that all of these gauges give such positive news. Many (including yours truly) worried that the Fed’s efforts to tame inflation by raising interest rates and slowing the economy would plunge us into a recession.

Instead, we’ve got a true Goldilocks economy.

A strong job market and rising wages have enabled many households to keep spending — which in turn is propelling economic growth, more jobs, and consumer confidence.

How will all this translate into politics — in particular, Biden’s odds of prevailing over Trump next November?

For much of the past year, Americans have remained grumpy about the economy. That grumpiness has cast a pall over Biden’s chances. The increasingly good economic news hasn’t changed their mood.

Some of the persistent grumpiness is due to continuing high monthly household costs. Housing is taking a bigger bite out of the typical paycheck than at any time since 1984. Groceries and child care are the next big recurring charges. Gas is down a bit but still high by historic standards. And given high interest rates, the monthly cost of car loans is another problem.

Some grumpiness is due to the long-term stagnation of the American working class. Non-supervisory workers who rely on an hourly wage — a majority of working people — are doing slightly better now as wages rise and inflation falls but are still way behind where they want and expect to be.

Finally, there are the Trump Republican lies.

Here’s Trump’s latest — in a speech he delivered last Sunday in Rochester, New Hampshire (as far as I can tell, he keeps repeating this lie):

“We had the best unemployment rates ever. And they were real unemployment, not like you have today where nobody’s working and they consider it to be. It’s a whole different thing. Too complicated to explain, but it’s a whole different thing. You don’t have to know about it.”

The truth is that the unemployment rate during Trump’s presidency dropped to a low of 3.5 percent exactly twice — in September 2019 and February 2020. That’s as low as it got.

But the unemployment rate under Joe Biden has been even lower. It was 3.4 percent for two months last year. (That’s no small achievement since Biden had a lot of catching up to do. The unemployment rate was 6.4 percent when he took office.)

Trump lies about everything, of course, but his economic lies shouldn’t be assumed to have no effect on the public — or at least on that portion of the public that listens to Trump. His lies are amplified by other Republicans and by Fox News and right-wing radio.

During his 2016 campaign, when the official unemployment rate was around 5 percent, Trump claimed it was really 22 percent or even as high as 42 percent.

“Don’t believe those phony numbers when you hear 4.9 and 5 percent unemployment,” he declared after he won the New Hampshire primary that year. “The number’s probably 28, 29, as high as 35. In fact, I even heard recently 42 percent.”

I can assure you as a former secretary of labor — who did everything possible to maintain the hard-won independence and political impartiality of the Bureau of Labor Statistics — that the unemployment rate is not a hoax. The monthly unemployment figure is subject to a range of checks and balances. Tens of thousands of people are involved in constructing and reviewing it each month and comparing each new figure with seven decades of data that came before it.

But Trump doesn’t buy government economic data — when he doesn’t like what it shows.

On the other hand, he embraced the BLS unemployment data when it showed unemployment falling under his watch.

When reporters asked White House Press Secretary Sean Spicer (remember him?) about the contradiction between Trump’s attacks on the BLS data during the 2016 campaign and his eagerness to embrace it as president, Spicer said: “I talked to the president prior to this and he said to quote him very clearly. ‘They may have been phony in the past, but it’s very real now.’”

Sort of reminds me of the “alternative facts, facts.”

But now that the data is showing the economy doing remarkably well under Biden, Trump is once again suggesting the numbers can’t be trusted.

We know who can’t be trusted.