The pre-Covid economy was far from the greatest in history, with growth not much different than rates seen under President Barack Obama and far slower than many booming periods since World War II. All the unemployment records Trump boasted about also come from trends that began ten years ago and changed little under Trump until the Covid-19 collapse. While Trump loves to claim credit for overseeing a historic low 3.5 percent jobless rate in February before the pandemic struck, unemployment had already been falling from a peak of 10 percent in 2009 down to 4.7 percent when Trump took office in January 2017.
Trump and Vice President Mike Pence also boasted of the 9 million jobs created over the last two months. But that figure replaced less than half of the 22 million lost in the two months before. And the pace of job gains slowed sharply from 4.8 million in June to 1.8 million in July. Economists expect the number to drop again to about 1.4 million when the August employment report comes out on Friday.
The rapid recovery that Trump and Pence spoke of at the convention does not square with the reality of new jobless claims that continue to flood in around 1 million per week, well above the previous record of close to 700,000 set in the 1980s.
Big companies including Coca-Cola, American Airlines, Delta Air Lines and Bed Bath & Beyond continue to announce or warn of serious job cuts in the wake of a pandemic that has killed over 180,000 Americans. Coke last week offered buyouts to nearly 40 percent of its North American workforce. And there is widespread fear across the country that students returning to schools in September could cause fresh spikes and perhaps new lockdowns.
The disconnect between the rosy picture of rapid recovery painted by Trump and the reality on the ground for millions of Americans not in higher income brackets or invested in the stock market is one Biden and his advisers are keen to exploit in the final weeks of the campaign.
“The economy is slowing and threatening a stall if the next fiscal package doesn’t quickly get out there,” Jared Bernstein, Biden’s top economic aide in the Obama White House, told POLITICO at a recent event. “Absent a real shift in our policy architecture, this is going to be a tale of two recoveries, where the top moves along with the stock market and everybody else is either barely getting by or really not getting by.” Talks over another stimulus bill remain completely deadlocked on Capitol Hill.
White House officials are aware of the risks posed by cheerleading a still-struggling economy and talking up an uneven and somewhat halting recovery. But they have clearly decided that talking up the good numbers and promising much faster growth to come is the best political path forward.
“Not everybody agrees with me, but I see a very strong rebound coming after the dreadful contraction that we experienced pretty much across the board,” National Economic Council Director Larry Kudlow told POLITICO at an event during the GOP convention. “We’re not home yet. Certainly there’s much, much more work to be done,” Kudlow said. “But you know me — I love optimism and I hate pessimism.”
Democrats across the country, meanwhile, plan to punch back hard in the last nine weeks of the campaign on Trump’s boasts about both his economic record pre-Covid and the nature of the recovery since the worst of the collapse.
“We have to make it very clear to people that this president has the worst job creation record under any president in United States history,” Rep. Cedric Richmond (D-La.), a co-chair of Biden’s campaign, said on NBC’s “Meet the Press” on Sunday. “He’s lost six million jobs. The Obama-Biden era created 16 million jobs coming out of the Great Recession. This president just does not have an economic plan, and I think Democrats have to home in on that.”