Historically strong economy bolsters Trump’s 2020 chances

While seeking the Republican nominations, then-candidate Donald Trump promised that he would be “the greatest jobs president God ever created.” With unemployment at historic lows, he seems to be on his way to fulfilling that pledge.

However, jobs haven’t been his only economic victory: thus far, he’s been a pretty good stock market president, too. That’s what a recent report from CNBC’s Maggie Fitzgerald would indicate, anyway. 

Stock market victory

Titled “Trump stock market rally is far outpacing past U.S. presidents,” the report details the market growth that has taken place under his tenure.

Speaking of the S&P 500, Fitzgerald writes, “The bellwether index gained more than 28% this year, well above the average 12.8% return of year three for past U.S. presidents.”

Additionally, it’s grown by “more than 50% since Trump was elected, more than double the 23% average market return of presidents three years into their term, according to data from Bespoke Investment Group dating to 1928.” Fitzgerald notes that this performance is particularly impressive given “the volatility from the U.S.-China trade war.”

“Trump’s first year was about triple the presidential average, with the S&P 500 gaining 19.4% compared with the average 5.7%.”

She gives some of the credit to Federal Reserve Chair Jerome Powell, under whose leadership interests rates have been kept relatively low (although not low enough for Trump’s liking). However, Fitzgerald also believes that the unemployment situation has been a major factor.

More jobs make for more consumer confidence

“Markets were also helped by one of the tightest labor markets in history, with the unemployment rate currently at 3.5%, its lowest since 1969. And since Americans were working, they were also spending,” she wrote.

“The strong U.S. consumer held the economy up during some reported manufacturing contractions. Consumers also held strong amid a messy bond market, when shorter-term bond yields rose above long-term yields, causing the yield curve to invert, a phenomenon known to precede recessions.”

“The curve,” Fitzgerald explains, “has since steepened and is no longer inverted.”

Granted, Trump’s stock market record hasn’t been spotless, with his “sore spot” being his second year in office. That saw the market’s “worst December since the Great Depression,” something Fitzgerald attributes to trade conflict with China.

However, when it comes to the future, Fitzgerald is confident. “If history is any guide,” she concludes, “Trump is in for another strong year in 2020.”

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