Updated Comparison of U.S. Economic Performance Under Obama and Bush43
July 17, 2015
This note is an update of a series of earlier articles on Currency Thoughts that compared the U.S. economic performance under different presidential stewardships, including this prior article from January 2012. It’s seems pretty clear that U.S. voters next year will be presented with a stark choice on domestic economic policies. Now that both Obama’s 6-1/2 years and Bush 43’s eight years in office comprise a large body of work, it seemed fitting to take another look at five key measures of economic well-being from their respective tenures.
The findings are presented in the table below. The five trends examined are real GDP growth, total consumer price inflation, growth in nonfarm payroll employment, the Dow Jones Industrial Average and the dollar against the euro. Each statistic is express as an annualized percentage change during their presidencies. On real GDP, the two periods are evenly matched, but on the other four measures, Obama’s presidency has performed better than the economy did under Bush and, more importantly, by a greater margin than found in the earlier study linked above.
| Percent per Annum | Obama | Bush 43 |
| Real GDP | 1.8% | 1.8% |
| Jobs | 0.9% | 0.1% |
| Inflation | 1.8% | 2.4% |
| Dow Jones (DJIA) | 13.5% | -3.5% |
| Dollar versus Euro | 6.5% | -4.1% |
Comment on Today’s U.S. Data Releases
A 0.3% month-on-month rise in total consumer prices last month followed a 0.4% increased in May, and energy was again a key driver, recording increases of 4.3% in May and then 1.7% in June. The 12-month rate of change was a gain of only 0.1% last month and ranged narrowly between -0.2% and +0.1% in the first half of 2015. Core inflation was 1.8% in June, printing at that level for the third time in four months. Viewed from a wider time perspective, core inflation has been between 1.6% and 1.8% since August of last year and in a range of 1.6-2.0% since August 2012. The U.S. doesn’t have deflation, nor is a state of contracting prices a likelihood. The Federal Reserve looks at a wide range of price measures, and the CPI is not a highly weighted determinant in that evaluation. That said, this latest report didn’t contain any information that would impede expected plans to raise interest rates later than year.
Other data do not refute the Fed’s expectation of stronger growth in the second than first half of 2015. Housing starts jumped 9.8% in June, and building permits went up 7.4%. Each level exceeded expectations, and set against June 2014, starts and permits had expanded by a robust 26.6% and 30.0%. The Reuters/U. Michigan preliminary reading of U.S. consumer confidence in July may have been influenced by expectations of an imminent Greek departure from the euro. The 93.3 reading is 2.8 points lower than June’s score and 1.5 points under the average reading in the first half of 2015. This indicator has been bouncing around lately, falling from 98.1 in January to 93.0 in March, recovering to 95.9 but then falling back to 90.7 in May and ricocheting to 96.1 in June. Today’s economic data leave a fed rate hike in September more likely than not.
Copyright 2015, Larry Greenberg. All rights reserved. No secondary distribution without express permission.
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