Inheriting the Obama economy

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President Obama is handing his successor a remarkable gift: "an economy that's the envy of the world," said Ben White at ​Politico​. The unemployment rate fell to 4.6 percent in November, "the lowest level since August 2007." The stock market and U.S. home prices are at record highs, consumer spending and wages are both rising steadily, and the economy grew a better-than-expected 3.2 percent in the third quarter. The situation couldn't be more different from the one Obama inherited when he moved into the White House in the depths of the financial crisis — or from Donald Trump's campaign rhetoric about a U.S. economy suffering from high unemployment and stagnant growth. In fact, Trump will take office against the rosy backdrop of an "Obama boom."

"Presumably, our fact-agnostic president-elect will one day try to take credit for all this," said Jordan Weissmann at Slate. Trump repeatedly dismissed positive economic statistics in the run-up to the election, but I get the feeling he's going to learn to love them once he's in office. "Assuming the U.S. is still sailing smoothly a few months from now, there's no reason to assume we won't be hearing about the glories of the Trump economy." Let's not sugarcoat Obama's economic record, said Ray Keating at RealClearMarkets. Annual economic growth has averaged a mere 2.1 percent since the recession ended in 2009, "compared with the historic average of 4.3 percent." As for the recent jobs report, the unemployment rate dipped mostly because people stopped looking for work, not because they found new jobs. In reality, Obama is "handing over a badly underperforming economy."

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"Of course, presidents are ultimately judged little by the economy they inherit, and more about where it goes under their watch," said Josh Zumbrun at The Wall Street Journal. It's true that Trump will inherit one of the lowest unemployment rates for any U.S. president taking office; going back to 1960, only Richard Nixon and George W. Bush enjoyed lower rates before assuming the presidency. But that figure doesn't tell the entire story. For instance, Trump will have to address the growing number of working-age men who have dropped out of the workforce entirely. In the 1960s, just 2.7 percent of men ages 25 to 54 were outside the labor force; today, it's 11.5 percent. And wages, while rising, grew just 2.1 percent over the past 12 months, "the lowest figure on record for any November in which a new president was elected."

"The economy isn't perfect; it never is," said Neil Irwin at The New York Times. But with the unemployment rate finally back to where it was just before the financial crisis hit, let's be glad that the economy has more or less healed "from its trauma of the past nine years." That doesn't mean Trump won't muck everything up, said Chris Matthews at Fortune. Right now, a recession doesn't seem likely, but who knows what will happen if Trump implements some of his more unorthodox economic proposals, like scrapping free-trade deals or levying punishing tariffs on businesses that move jobs out of the U.S. Trump might want to tread lightly. All the data suggest he is "one of the luckier president-elects in recent memory."