U.S. Stock Market of Trump Compared to Earlier Presidencies

September 21, 2020

The favorable impression of the stock market performance during President Trump’s first term reflects in large part two factors: the very low unemployment level until just before the pandemic began and the appreciation of U.S. equity prices.

The performance of the Dow Jones Industrials duringĀ  Donald Trump’s stewardship, however, has not been nearly as stellar as he would have people believe. Most of its climb occurred in the first year. From the 2017 high of 24,834 on December 28th that year to the current level of 27,096, the index rose at an annualized rate of 3.2%. Over the identical nearly three-year-period of the first presidential term of his five predecessors, by comparison, the Dow appreciated at annualized rates of 9.8% under Barack Obama, 0.4% under George W. Bush, 17.6% under Bill Clinton, 7.5% under George Herbert Walker Bush and 12.7% under Ronald Reagan.

To be sure, 2017 was a very good year for U.S. stocks in anticipation of the huge corporate tax cut legislated late that year. Alas, private business investment received a much smaller-than-forecast and briefer-than-expected lift from the tax cut, whose main enduring legacy has been a big increase in the public sector deficit.

Copyright 2020, Larry Greenberg. All rights reserved. No secondary distribution without express permission.

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