Yahoo Finance This week in Trumponomics: Warning signs for Trump
President Trump gave a speech in Davos, Switzerland this week, bragging about the U.S. economy under his watch. He focused on working- and middle-class Americans and basically said they’re doing great.
Trump should be careful. He’s telling many Americans they’re better off, trust him, than they think they are themselves. Some might believe it, and decide to give Trump another four years when they vote in November. But others might resent Trump’s presumptuousness and decide he’s trying to snow them.
Trump, for instance, claimed there’s a “blue-collar boom” in America, with lower-income people getting ahead faster than higher-income people. Many facts demonstrate this is not true, but to check, Yahoo Finance ran a poll asking audience members if they think there is a blue-collar boom, as Trump insists.
Few respondents agree. Of 951 respondents who described themselves as blue-collar, only 21% said there’s a blue-collar boom, while 78% said there’s not a blue-collar boom.
This aligns with a wealth of data showing pockets of the blue-collar and middle-class economies are doing fine, but many families still struggle to keep up with medical bills, rent, inflation and the rising skill levels needed to get ahead. Trump is downplaying people’s struggles and overstating his own success, which is why this week’s Trump-o-meter reads WEAK, the third-lowest rating.
There’s no reason to fear a recession this year, but likely growth of around 2% won’t do a lot to help lift struggling families. Trump bragged about income gains among lower-income workers, yet wages are only up about 3% for this group during the last year. Inflation is 2.3% – and health care inflation is a lot higher than that—which is why 3% income growth doesn’t go very far.
In our survey, we asked respondents to describe the state of the economy in their own words. Many of the responses echoed themes Democratic presidential candidates are highlighting as they campaign. Samples:
“For large companies great; for small businesses and self-employed, terrible.”
“Terrible except for top 5%. Only growth is in stocks and financial jobs and low paying serving and hotel jobs.”
“Health care/insurance still takes too much of one's paycheck especially those who don't have insurance from their job.”
There are some optimists, to be sure, such as the respondent who told us, “Stock market is solid, 401K is doing very well, unemployment is down and many people have disposal income.” That person said he recently purchased a second home. And solid consumer confidence numbers nationwide show that Americans overall feel pretty good.
But the U.S. economy is segregated into those getting ahead and those barely keeping up. Prosperous zones include vibrant coastal regions, university towns, energy corridors, tech-heavy urban areas and some manufacturing regions. Many other areas lack an economic anchor, with too many workers stuck in low-wage jobs. It’s not clear this gap has narrowed under Trump, and it may have widened. He should be mindful of who’s listening when the talks about he remarkable Trump economy.
Rick Newman is the author of four books, including “Rebounders: How Winners Pivot from Setback to Success.” Follow him on Twitter: @rickjnewman. Confidential tip line: rickjnewman@yahoo.com. Encrypted communication available. Click here to get Rick’s stories by email.
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