Strong jobs report could complicate Democrats' economic case against Trump
WASHINGTON (Sinclair Broadcast Group) — Job growth exceeded economists’ expectations in November, providing new evidence of the economy’s strength as President Donald Trump gears up for his 2020 reelection bid, but experts are unsure the president will be able to fully capitalize on what should be a major asset for his campaign.
Data released by the Labor Department Friday showed unemployment dropping to a 50-year low of 3.5% with 266,000 new jobs added in November and estimates for the previous two months revised upward by 41,000. Wages were also up 3.1% over 2018, which is solid growth compared to recent years but slower than economists would expect with unemployment this low.
President Trump sought to highlight the strong economic news on Twitter, tweeting “GREAT JOBS REPORT” and quoting several reporters commenting on the impressive jobs numbers.
“Stock Markets Up Record Numbers. For this year alone, Dow up 18.65%, S&P up 24.36%, Nasdaq Composite up 29.17%. ‘It’s the economy, stupid,’” he tweeted at one point, citing the successful mantra of Bill Clinton’s 1992 presidential campaign.
If that maxim holds true in 2020, Trump is well-positioned for reelection. But in a campaign fueled by deep partisan polarization, impeachment, early-morning tweetstorms, and unpredictable primetime rallies, a surging labor market and respectable economic growth may not be enough to ensure victory for this incumbent.
“The normal rules of political gravity no longer apply,” said Democratic strategist Craig Varoga. “Voters’ opinions about Trump are baked in. Good news and bad news no longer move the needle. The only major variable is the identity of the Democratic nominee, and it may be another half-year until we know who that is.”
Some economic analysts have projected a relatively smooth path to reelection for Trump, but their models do not account for a number of less tangible factors that could sway voters. Earlier this fall, Moody’s Analytics, Oxford Economics, and Trend Macrolytics all released analyses that suggest Trump is poised to win in 2020 by a wider margin than in 2016 on the strength of the economy.
An analysis posted this week by Michael Cembalest, chairman of market and investment strategy for JPMorgan Asset Management, found President Trump has the strongest economic tailwinds of any incumbent since 1896. However, positive economic developments have been crowded out of mainstream media coverage over the last year by the Mueller investigation, corruption allegations, and various other political controversies.
Although fears of a recession have spiked at several points this year, recent economic forecasts for 2020 have been more upbeat. In a note to investors last week, Goldman Sachs analysts downgraded the risk of a recession to 20% and predicted unemployment will fall even further in 2020 to 3.25%, the lowest level since the Korean War.
The bank also anticipates trade tensions cooling with the signing of phase one of an agreement with China, even if phase two remains unresolved until 2021. It estimates wage growth of 3.5% next year, with the biggest gains for lower-income workers.
Despite the economic optimism, Trump continues to trail top Democratic contenders head-to-head, and most polls indicate a plurality of voters support removing him from office before the election through impeachment proceedings.
“A good economy can help you as an incumbent, but a bad economy always kills you,” said David Hopkins, author of “Red Fighting Blue: How Geography and Electoral Rules Polarize American Politics” and a professor at Boston College. “It helps Trump that the economy is doing as well as its doing, but you don’t get as much credit for an expanding economy as you get blame for a contracting economy.”
While President Trump’s overall approval rating has remained underwater in most polls throughout his presidency, he has consistently drawn much more favorable numbers on his handling of the economy. Barring an unforeseen downturn, it is likely to remain his strongest issue in 2020.
According to RealClearPolitics, Trump’s current average approval rating is 43.7%, with most recent surveys finding his favorability in the low-to-mid 40s. His average approval on the economy is 53%, compared to an average of 41% on foreign policy.
A mid-November Gallup poll found Trump’s net approval on the economy at +15 points, whereas voters disapproved of his health care policy by an equal margin and his handling of trade by 10 points.
Still, Trump has blunted the impact of positive economic data in the past, sidetracking news cycles with vitriolic tweets and controversial comments that often galvanize his base but alienate moderates. Experts are skeptical he will prove to be more disciplined in the year ahead, even if aides advise him it would be beneficial to do so.
“We’re dealing with a candidate who’s not a standard candidate, who doesn’t have a standard message discipline, and who’s motivated largely by revving up his existing supporters,” Hopkins said.
He attributed much of Trump’s current political vulnerability to a failure to expand his base and win over those who did not support him in 2016. Republican midterm losses in 2018 reflected in part a growing disdain for the president among women and suburban voters that could present a serious hurdle for his 2020 run.
Republican strategist David Payne noted President Trump has shown flashes of message discipline at times and generally been rewarded for it. When he behaves more like a conventional politician, focuses on the economy, avoids controversy, or just stays out of the headlines entirely for a while, his support has risen.
“In a way, he can improve his approval rating by doing nothing,” he said, though he acknowledged that may not be a tenable strategy in an election year.
According to Payne, presidents can only expect a boost from a strong economy if voters like them, and that has been an obstacle for Trump so far. As the impeachment fight winds down early next year, he sees an opportunity for the president to set aside the stoking of political grievances and campaign as a “happy warrior” on the economy, though there is no guarantee the Trump will take it.
“He has a year to flip the script, to become less combative, less angry, to move past impeachment and generate a positive campaign message,” Payne said. “He has to sweat the big stuff, not the small stuff... With that, he wins a second term. There’s no doubt in my mind.”
Continued economic gains complicate Democrats’ argument on an issue that has helped propel their last two presidents to the Oval Office. Unlike Clinton and Barack Obama, their nominee will be asking voters to hand over the reins of an economy that most Americans believe is already heading in the right direction, albeit not as fast as some would like.
In primary debates this cycle, Democrats have often framed their economic argument around inequality, zeroing in on a disparity between outcomes for the wealthy and the middle class. Polls suggest that argument could resonate, with many workers feeling they have not yet seen significant economic benefits and complaining that they are still struggling financially.
“Low unemployment numbers do not tell the whole story. Across the country, families struggle to pay their bills every month and nearly 14% of American workers are seeing no wage growth at all. The reality is that we don’t have a jobs problem, we have a pay problem,” 2020 candidate former Rep. John Delaney said in a statement on the jobs report Friday.
Economic anxiety and trade wars have weighed particularly heavily on the manufacturing sector in recent months, giving the president’s opponents a potential opening with midwestern voters in an industry he promised to revitalize.
“President Trump now asks average Americans to cheer on the obscene financial gains of their ultra-wealthy countrymen while accepting a declining economic landscape for themselves,” Democratic strategist Max Burns argued in an op-ed for The Independent this week. “As he and his complicit Republican Senate push for ever lower taxes for their billionaire base, the middle class will be left to pick up the scraps of an unprecedented economic boom.”
If wages continue to tick up and unemployment stays at historic lows, that could become an increasingly difficult sell. According to Payne, Democrats would be better served by keeping their focus on corruption, immigration, and other topics where they hold an advantage in public opinion.
“It’s a tough topical area for them to compete in,” he said. “They’re much better off competing against Donald Trump on style, on personality, on impeachment. They have room to run there. They don’t on the economy.”
However, Hopkins doubts candidates can avoid an economic debate with Trump and he is not convinced they should. He argued Democratic nominee Hillary Clinton strayed from economic issues in the 2016 race to her detriment.
“One of the things that happened in 2016 was that the Clinton campaign wound up talking an awful lot about Trump personally and about issues around race and gender and they kind of got away from their traditional economic message,” he said. “My guess is this time around there will be a feeling that was maybe a mistake and they need to reestablish the party’s voice on economic matters.”
The surprisingly strong November jobs report could give President Trump a short-term political jolt at a precarious moment with the House expected to vote on impeachment in the next two weeks, but it will likely only influence the 2020 election if the gains can be sustained well into next year. Research shows the previous 12 months are what matter most to voters on Election Day.
“Nobody is going to be thinking about today’s job numbers six months from now,” Payne said.
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At a time when the vast majority of Americans already have strongly-held opinions about the president, the economy may matter less to most of the electorate in 2020 than it has in past elections. A shrinking faction of undecided voters in key swing states will determine whether Trump serves a second term, though, and their economic circumstances could weigh heavily on their decisions, for better or worse.
“It’s an election where not very many voters will change their minds or take the economy into consideration,” Hopkins said, “but those voters could well end up being decisive.”
