Fact-Checking Trump's Tweets On The Economy
NOEL KING, HOST:
President Trump was tweeting about the economy and trade this weekend. He criticized Harley-Davidson again for its plans to move production to Europe. He said NAFTA negotiations were going smoothly, just not with Canada. And he celebrated the country's low unemployment rate. Here's what he said in one tweet. Quote, "I am proud to have fought for and secured the lowest African-American and Hispanic unemployment rates in history."
All right, so we're going to do a fact check on some of the president's econ tweets with David Wessel. He's director of the Hutchins Center at the Brookings Institution. Good morning, David.
DAVID WESSEL: Good morning.
KING: All right. So this is a big and interesting claim, the lowest unemployment rate among African-Americans and Hispanics. Is that true?
WESSEL: It is true. The records go back to the early 1970s, and Latino unemployment is now at 4.5 percent, African-American unemployment at 6.6 percent. Those are the lowest on record. But remember, the unemployment rate only counts those people who are looking for work, not the large number of people still on the sidelines of the economy. So for instance, among African-Americans between the ages of 25 and 54, what economists call prime age men - I don't like the thing, as a 64-year-old - 1 in 5 of those people, men and women, are not working nor looking for work.
KING: All right. So fact checked, but with some qualifications. The president also this weekend re-tweeted a tweet from "Fox And Friends" that says unemployment numbers are better than they've been in 50 years, and perhaps ever.
How much credit does the president deserve for that?
WESSEL: Well, the president always gets blame when the economy's bad and always gets credit when the economy's good...
WESSEL: ...And usually deserves less than he or she gets. But the fact is the president did preside over some big tax cuts. They are boosting the economy. And I think the president did boost business spirits, which have something to do with how much businesses invest in and hire, at the beginning of the administration when he was talking about tax cuts and deregulation. I think, however, that the trade war has taken business spirits in the other direction. But I think the president doesn't like to mention the fact that wages are not going up. In fact, the Labor Department said last week that average hourly working - average hourly earnings for American workers are not rising enough to offset inflation. They're actually lower than they were a year ago.
KING: And this is a big and fascinating mystery because we've got a tight labor market, and yet people's wages aren't rising. What is going on?
WESSEL: Right. It's a really good question. We don't really know the answer. Some of it suggests that maybe the labor market isn't as tight as the unemployment rate looks, that there are these people on the sidelines of the economy who are coming back. But there are other things going on, too. Unions have less power. There's many more labor markets where one employer has all the - has a big share, and that's pushing down wages. And, of course, the possibility of temp work or contract work has also made it - shifted the bargaining power to employers from employees.
KING: David, last question for you. The trade war or trade wars, however we could put that, what effect might that have on the economy?
WESSEL: Well, there's lots of examples of individual companies that are suffering from the trade war - newspapers cutting back because of tariffs on Canadian newsprint, New England lobstermen selling fewer lobsters because China's raised the tariffs on theirs and not on the ones coming from Canada. But if you look at the overall economy so far - and that's important - it's really hard to see that the trade war is having much deleterious effect on the economy. At least, not yet.
KING: Wait-and-see situation. David Wessel is director of the Hutchins Center on Fiscal and Monetary Policy at Brookings, and he joins us regularly on Morning Edition. Thanks, David.
WESSEL: You're welcome.
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