Moreover, overall inflation has been low enough that even the soft 3.1 percent growth in average hourly earnings means pay is rising faster than prices for consumer goods — so it’s not as if workers are ending up worse off, on average.
Although most sectors of the economy are revving, creating jobs at a healthy pace, there is a notable exception. Manufacturers cut 12,000 jobs in January, the second straight month of decline.
This partly reflects the effects of the trade war, and may reflect ripple effects from Boeing’s shutdown of production of its troubled 737 Max plane. There’s no telling how the politics of the manufacturing slump may play out in key battleground states.
The good news for the Trump administration is that this opens the door for a rebound in the sector between now and Election Day. Already, the calming of trade tensions with China with a “Phase One” deal in January has settled financial markets. And a key survey of manufacturers suggests that the sector swung from contraction to expansion in January.
Presidents’ economic records are highly dependent on where the nation is in the economic cycle. They have less control of the economy than a lot of people think.
Tax and regulatory policies matter, certainly, as do appointments to the Fed. But exactly how much decisions in the Oval Office shape the course of a $20 trillion economy is more open to debate. What is more clear is that good economic conditions tend to favor incumbents — a persistent finding of political science research, although recent research suggests there’s a smaller effect because of greater polarization.
There are no guarantees in life, and for all we know the economy could hit some slump over the coming months. Coronavirus could spread in a way that damages economies globally, trade wars could re-escalate, or some unforeseen catastrophe could emerge.
Article source: https://www.nytimes.com/2020/02/07/upshot/election-year-economy-trump.html?emc=rss&partner=rss
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