I only listened to part of Obama’s farewell address, then Sean Hannity came on, and started attacking Obama on economic policy. It was way over the top. In Part 1, three graphs, showing the Dow Jones Industrial Average, housing starts and unemployment show a very solid economic recovery trend from mid 2009 to 2016.
But, the US economy has been changing. Workers with an assembly line job for a car manufacturer, could count on steady employment so long as the cars sold. Now, the big two challenges are whether the company wants to continue to manufacture the cars in the US and whether the job can be replaced by computer controlled robots.
The above graph is from http://www.fivethirtyeight.com. Job growth in manufacturing has increased beginning in mid 2009, but there has been a down trend in manufacturing since about year 2000. So, Obama should be praised not blamed for help change the direction of the trend. The profits of manufacturers have not declined, except during the last year of the Bush term and manufacturing output has increased. So we make more with less workers. The culprit is automation.
The housing ownership percentage was the highest around 2004 to 2006, during the housing bubble that finally burst in 2008. Does anybody still remember how people the ninjas (no income, no jobs) could get high interest loans and then these toxic assets were bundled with other debts to somehow qualify as safe investments?
Finally, and least important is the labor participation graph. This shows over 24 year period, the percentage of the population working was increasing 5%, until it reach a maximum in 1997, and started to decline.
This was a surprise to me. It certainly does not correlate with recessions or other common measures of the economy, as shown below:
The shaded bars represent recessions. During recessions, generally unemployment goes up, so why is labor participation going up during all recessions except the two? This downward trend is due in large part to the baby boomers retiring. Overall employment during Obama’s term increased steadily.
I’ve seen a lot of booms and busts. You can see a bust in the shopping centers. New car lots are going out of business. Foreclosures everywhere. It didn’t happen on Obama’s watch.
I’ve shown three common measures of the economy: stock market, unemployment and housing starts – all solid trends.
I’ve shown manufacturing employment is down from levels 25 years ago. Profits are not. The last two statistic, home ownership and labor participation have to do with demographics which I don’t think Trump will change. Well, unless he wants to get the over 65 year old’s back on the assembly lines.