White House Press Secretary Sarah Sanders was vocal on Twitter Sunday, issuing biting criticism of former President Barack Obama. In Sanders’ typically blunt vernacular, she claimed that President Obama did not deserve any credit for the apparent improvement in the economy. However, while the economy is doing well and Trump largely deserves praise, Americans would be wise to pay attention the labor force participation rate.
Since the election "the jobless rate for African Americans dropped from 8% to 7.3%, while for Hispanics it fell from 5.7% to 4.7%...and with Trump's big tax cuts on the way, job growth isn't likely to end soon -more good news for all Americans." -Investor's Business Daily— Sarah Sanders (@PressSec) December 10, 2017
Can't make it up: Obama now wants credit for the booming Trump economy. At least we can all agree the economy is better under President Trump.— Sarah Sanders (@PressSec) December 10, 2017
I'm old enough to remember when President Trump's election was going to "crash the market." One year later: market up over 30%, two million new jobs & 1,000 new manufacturing jobs created every day just last month...and now Obama wants credit for the booming Trump economy.— Sarah Sanders (@PressSec) December 10, 2017
Indeed, many critics were worried that the economy would fail miserably under President Trump. Liberal New York Times columnist Paul Krugman predicted economic ruin with no end in sight under the new president. Specifically, he said that the markets would “never recover” thanks to Trump.
“It really does now look like President Donald J. Trump, and markets are plunging. When might we expect them to recover? If the question is when markets will recover, a first-pass answer is never," he wrote.
“We are very probably looking at a global recession, with no end in sight. I suppose we could get lucky somehow. But on economics, as on everything else, a terrible thing has just happened.”
This, of course, has proven to be false.
Yet, one area of economic concern that should be mentioned is the labor force participation rate. According to Investor's Business Daily, based on the labor force participation rate, the actual unemployment is much higher. Individuals who have been looking for a job longer than four weeks are not counted as participating in the labor force, they are considered "no longer actively seeking a job."
"Back in December 2000, the unemployment rate was 3.9%. But that month, the labor force participation rate — the share of the population that's either working or looking for a job — was 67%.
The current rate: 62.7%.
If the labor force participation rate were the same today as it was in 2000, the official unemployment rate would be more like 10%.
Some of this decline in labor participation can be explained by the baby boomer generation hitting retirement. But not nearly all of it. While the number of people above age 65 climbed by 14.3 million over the past 17 years, the population not in the labor force swelled by 25 million.
There is clearly still a need for pro-growth policies to get millions of workers sitting on the sidelines back to work."
Still, even if you counted the actual unemployment rate, the economy has improved since Obama left office largely due to Trump's de-regulation and tax reform efforts.