by Mitch Kokai
Senior Political Analyst, John Locke Foundation
The most surprising thing about the latest unemployment report isn’t that the rate dropped to the lowest level since December 1969. It’s that unemployment wasn’t supposed to get anywhere near that low under President Trump. At least, not if you believed mainstream Keynesian economists. …
… This is good news, but it continues to confound mainstream economists, who solemnly predicted at the start of Trump’s administration that we faced a “secular stagnation.” Any talk of strong economic growth was a fantasy.
When the economy started to outperform expectations, liberals shrugged it off by claiming that the upturn in growth was all baked in the cake when President Obama was president.
That is false.
We can get a sense of the true impact of Trump’s economic policies by comparing the actual results since he took office to the forecasts made at that time. What did economists think the economy would be like if nothing changed over the next 10 years in terms of tax rates or regulatory policies. …
… GDP growth has exceeded the CBO’s forecast in every quarter starting with Q2 2017. That includes the second quarter of this year, which saw 2% growth where the CBO had projected 1.5%.
As a result, the economy is now $590 billion bigger than it was supposed to be.
The CBO projected that unemployment would never get below 4.4%, and would start rising again this year. Instead, the unemployment rate fell from 4% at the start of the year to 3.5%. The current unemployment rate is now a full percentage point below the CBO’s forecast. That translates into 1.6 million more people employed than the CBO expected.