Trump Administration Had Mixed Economic Results for First Quarter, 2017

Now that economic data is available for the the first quarter of 2017, it appears investors were enthusiastic about the future business prospects under the Trump Administration.  Stocks rose sharply and the economy continued to add jobs, following 75 straight months of job growth under the Obama Administration. On the other hand, auto sales were down and investors were concerned over the Republican’s failure to improve Obamacare.  Of course, since this was a transition quarter and the Obama administration was still in power during most of January, 2017, it is too early to draw many long-term conclusions about the economy based on this early data from the Trump Administration.

Now that the Republicans are in control of the White House, Senate and House of Representatives, the effect of their policies will have a greater impact as time goes by.   Eventually, investors will be able to see if corporate profits actually improve based on changes made by the President and Congress. So far, however, the data shown below is what we know.

U.S. Stock Market Closing Prices 3/31/17 compared to 1/3/17 :

The most dramatic shift in economic data during the first quarter was the rise in stock prices.  Much of the increase in stock values was attributed to the hope that Trump and the Republicans in Congress will be able to reduce regulations and lower taxes for corporations.  If the Trump administration has difficulty implementing their proposals, the markets could cool off later in the year.  Their inability to make improvements to Obamacare caused some concern. In the first quarter, however, investors saw a strong bull market.

Dow Jones Industrial Averages: 20663.22  (up from 19881.76)

S & P 500:  2362.71  (up from 2257.83)

NASDAQ:   5911.74  (up from 5429.08)

The Economic Record under the Past Few Presidents:

Jobs

Median Monthly Jobs Report:

Trump:  166,500 average for Feb. and March, 2017
Obama:  186,000 a month over eight years
Bush:        61,000 a month over eight years
Clinton:  252,000 a month over eight years

Wages

Median yearly net wage growth
Trump:    2.7 percent compared to previous year
Obama:     2.2 percent
Bush:        3.3 percent
Clinton:    3.5 percent

Markets

Average of compound annual growth rate for S&P 500 Total Returns
Trump:  Too soon to tell, although S&P 500 is up 4.6 percent so far in 2017
Obama:   +15.52
Bush:           -3.82
Clinton:   +17.44

One interesting bit of data was there were more billion dollar weather disasters during Jan. through March 2017 than occurred during any previous first quarter in U.S. history.  It is unclear whether this is related to climate change or other factors.  It will be interesting to see if the trend continues throughout the year.

Last Year’s Stock Market and Economic Highlights for 2016:

If you wish to compare 2017 to 2016, here are a few of the most notable events in the stock market and the economy last year, as well as so far this year:

The Dow Jones Industrial Average rose 13.4 percent during 2016.  As of the end of the first quarter 2017, it was up approximately 4 percent.

The S&P 500 climbed over 9 percent in 2016.  As of the end of the first quarter 2017, it was up approximately 4.6 percent.

The Nasdaq was up over 7 percent during 2016.  As of the end of the first quarter 2017, it was up approximately 8.9 percent.

Average hourly wages were up over 2.4 percent during the year.  At the end of the first quarter 2017, they had risen 2.7 percent.

Unemployment had dropped to 4.7 percent by the end of 2016.  Unemployment was at 4.5 percent at the end of the first quarter, 2017.

Over 2 million new jobs were added to the economy during 2016. (11.3 million jobs created during the Obama administration, with job growth for a record 75 straight months).  Job growth continued during the first quarter of 2017, now at 78 straight months, although the numbers were considered disappointing in March, with only 98,000 jobs added.

In 2016, auto sales hit a new record high of 17.5 million.  During the first quarter of 2017, auto sales fell nearly 2 percent.

Resources:

Twitter.com / MSN Money / Market Watch / YahooFinance / Bloomberg / Reuters / Wall Street Journal and other public news sources

Statistics on the past three presidential administrations:  marketwatch.com/story/the-trump-scoreboard-track-the-markets-and-economy-under-trump-in-one-graphic-2017-01-20?link=sfmw_tw

 


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