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The Job numbers have been growing steadily over the past couple of years. According to the latest jobs report, the number has increased by about a quarter of a million. So how much of this can be attributed to the new administration versus the results of policies over the previous 8 years under the Obama administration?
Edit: For those who are wondering what numbers I'm going off of, the most recent jobs reports can be found here: https://www.bls.gov/news.release/empsit.nr0.htm
Larry Bartels, a political scientist and expert electoral politics, published a book called Unequal Democracy which described how this works.
Evaluating how much a President influences economic policy requires the usage of a lag factor. Basically, this factor accounts for how long it takes a President to meaningfully affect an economy. In a simple substantive sense this makes sense: just being President doesn't have much of an effect, you have to start passing policies and those policies take more time before they actually achieve anything.
In his book, Dr. Bartels concludes that a 2-year lag term is generally most appropriate. So until about early 2019 Former President Obama's policies will have more to do with job growth/loss than President Trump's.
Of course, that is assuming that the Obama/Trump regime transition works the same as the others before it. Maybe it isn't. But that's for an individual to decide until enough time has passed to quantitatively start dis-tangling these different effects. To be honest, that likely won't happen for quite a while.
Politicians always claim more credit for a good jobs market than they deserve and get more blame for a bad jobs market than they deserve. Politicians in general and presidents in particular have limited impact on the economy. Especially positive impact.
The jobs numbers have been improving, but the inflation numbers have been getting worse. This suggests that it has more to do with Federal Reserve action (or lack thereof). The money supply would seem to be growing faster than is necessary for real growth, causing some inflationary growth. To the extent that that is happening, current growth may turn out to be illusionary.
Prior to the election, some had asserted that a Donald Trump win would cause a stock market crash and a recession. That view lasted for about a day after the election and then the market started setting new records. But if that perspective had been true, we'd be headed towards recession already. And even that confuses things a bit.
Stock markets have limited impact on the overall economy. A rising stock market makes it cheaper to raise capital. A falling market means that raising capital is getting more expensive. But only a limited number of companies are raising capital. And the impact on other things like benefits is limited since the stock market as a whole is moving.
Since the election, some people are reacting as if things that they expect Donald Trump to change are going to happen. Or that Donald Trump is going to block changes that they had expected Hillary Clinton to make. That could mean that some of the growth could be credited to Trump.
The economy went into recession around 2007, after the Democrats won the Congressional elections. It was recovering around 2009 and Republicans won in 2010 for 2011. So should we credit the 2011-2015 period to Democrats (presidency and Senate majority)? Or Republicans (House and Senate filibusters)? Does it matter that Republicans also took over a majority of the governorships and state legislatures in 2010 as well?
This also changed again at the beginning of 2015, when Republicans took the Senate. With the two year lag hypothesis, that would start being felt in 2017. And a two year lag is just a convenience. For example, the housing crash had its roots in the late 1990s. George W. Bush didn't stop or reverse those trends in the 2000s, but he didn't start them either.
We'll never have a real answer though, as there's no way to falsify a hypothesis. We can't rerun the 2007-2009 period with a Republican Congress. We can't rerun the 2009-2011 period without Democrats in control of all three of the presidency, the House, and the Senate (including months with a Senate supermajority). We can't rerun the 2011-2015 period with Democrats retaining the House. So we can't say what would have happened in those cases.
It should be obvious that to the extent that actual policies matter, they can't matter if they haven't been enacted yet. Only the perception and anticipation can matter. So if Trump deserves credit now, it's purely for perception and anticipation. That said, it's entirely possible that the perception and anticipation matter more than the actual policy. Perhaps business people were simply waiting for a president who empathized with their problems to feel secure enough to hire. But that would be nearly impossible to verify or disprove, particularly on the margins.
The American Reinvestment and Recovery Act is a large factor in economic growth that has occurred since Spring 2010.
https://en.wikipedia.org/wiki/American_Recovery_and_Reinvestment_Act_of_2009
You can see here, its stated purpose was to stimulate job growth.
The American Recovery and Reinvestment Act of 2009 (ARRA) (Pub.L. 111–5), nicknamed the Recovery Act, was a stimulus package enacted by the 111th U.S. Congress and signed into law by President Barack Obama in February 2009. Developed in response to the Great Recession, the ARRA's primary objective was to save existing jobs and create new ones as soon as possible.
For a full list of ARRA's provisions to stimulate economic recovery and job growth, see:
https://en.wikipedia.org/wiki/American_Recovery_and_Reinvestment_Act_of_2009#Provisions_of_the_Act
For context, ARRA was introduced as a direct response to the Financial Crisis of 2007-2008, also known as the Great Recession or the Global Financial Meltdown. During the Financial Crisis, the U-3 unemployment rate rose from 4.4% to 10.0%, and unemployment likely could have continued rising if not for government intervention. Later, where employment statistics are provided, pay attention for an inversion in job loss when ARRA goes into effect. For more about the Financial Crisis, see:
https://en.wikipedia.org/wiki/Financial_crisis_of_2007%E2%80%932008
Some of the economic interventions of ARRA come during tax season. So the big bulk of its influence should start to kick-in during the Spring of 2010, and continue lasting for as long as ARRA's stimulus was set to renew, which is through 2019. There was indeed noticeable job growth beginning in March 2010, and strictly positive job growth every month from October 2010 through present. Between March 2010 and January 2017, the U-3 unemployment rate fell 5.1%. During this period of time, the U-3 unemployment rate fell 0.062% per month; whereas between January 2017 and July 2018, the U-3 unemployment rate fell 0.05% per month. For monthly changes in job figures (in thousands), see:
https://data.bls.gov/timeseries/CES0000000001?output_view=net_1mth
For monthly data on unemployment rate, see:
https://data.bls.gov/timeseries/LNS14000000
Note that the Trump administration has not repealed ARRA, so it IS still in effect. If his economic policies provided any sort of economic growth above and beyond what ARRA was already doing, it should probably be visible by a change in the velocity of job growth. The rate of job growth has been relatively steady continuation from the Obama administration (slightly slower, actually, as indicated above. 0.062% per month vs 0.05% per month). Alternatively, we might see improvements in wage growth, rather than job growth. This is definitely important to look at, since the closer the unemployment rate gets to 0, the harder it is to achieve continued job growth, but the more wage growth should be expected. The Bureau of Labor Statistics reported that between July 2017 and July 2018, real average hourly earnings (adjusted for inflation) have fallen 0.4% over the past year.
https://www.bls.gov/news.release/pdf/realer.pdf
One economic effect that Trump's policy has had, is that the tax cut on corporations has led to at least $400 billion of corporate share repurchases, also known as stock buybacks. Share repurchases serve the role of artificially inflating "earnings per share" as well as the overall stock price per share. The result of this is that most new wealth is going towards existing major shareholders. But the budget for the 2018 fiscal year has had a very pronounced effect on the stock market.
https://money.cnn.com/2018/07/10/investing/stock-buybacks-record-tax-cuts/index.html
All of it. Investments are made based on expectations of future returns. Stock prices are based on expectations of future conditions improving or getting worse. Capital outlays for new equipment or hiring are based on expectations that those outlays will pay back in the future. None of these are lagging indicators.
By the time the lagging indicators catch up (GDP growth, tax receipts, revenue and profitability increases, increased workforce participation), all the increases will already be priced into the stock market.
But the truth is that many businesses have been laboring under a great deal of regulatory uncertainty in the Obama years, so improving upon Obama's record isn't really a giant improvement. We're finally getting the GDP growth and employment recovery we should have been getting back in 2009-2010.
