The stock market is one of the best stories in America right now—and it’s goosing President Trump’s performance when it comes to the broader economy.
New economic data pushed Trump’s grade on the economy from a B to a B+ in the latest installment of Yahoo Finance’s exclusive Trumponomics Report Card. Using data supplied by Moody’s Analytics, the report card compares Trump’s performance on the economy with six prior first-term presidents going back to the 1970s. (View our detailed methodology.)
The S&P 500 stock index rose about 1.2% in May, enough to boost Trump’s rating by two notches on this particular indicator. The stock market under Trump has exceeded its performance under Presidents George W. Bush, Bill Clinton, Ronald Reagan and Jimmy Carter at the same point in their first terms. Stocks did better at the four-month mark under Presidents Barack Obama and George H. W. Bush.
Here’s how the overall report card looks, as of early June:
Trump lost ground on employment in May, slipping by one notch compared with the six other presidents. The jobs report for May was disappointing, with employers adding 138,000 new jobs, or about 50,000 fewer than economists expected. On manufacturing employment, another key metric we monitor as part of the report card, employment actually fell by about 1,000 workers from month-to-month, although manufacturers have still added 43,000 workers on net under Trump so far. Here’s the tally of new jobs created under Trump, compared with his predecessors:
The weak May unemployment report may have been an anomaly, but years of strong job growth are still due to level out at some point. “May serves as a reminder that job growth will slow as the economy hits and surpasses full employment,” says Ryan Sweet, director of real-time economics at Moody’s Analytics. That could depress Trump’s grade on the economy in the future.
For now, investors fueling the stock-market rally like Trump’s proposals for tax cuts, deregulation and infrastructure spending, helping keep the market buoyant. But Trump also inherited a steadily improving economy. “Nothing much has changed for the economy since the election,” Sweet tells Yahoo Finance. “It is expanding at the same pace as it has throughout its nearly eight-year expansion.”
It’s also true that the economy can change dramatically during a president’s first term. Jimmy Carter began with explosive job growth in 1977 but a recession hit late in his first—and last—term. Barack Obama, by contrast, inherited a blistering recession and massive layoffs, but job growth had turned positive by the time he ran for reelection four years later. Trump, no doubt, would love to start like Carter and finish like Obama.
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Rick Newman is the author of four books, including Rebounders: How Winners Pivot from Setback to Success. Follow him on Twitter: @rickjnewman