For eight years, President Obama endlessly talked about "middle class" economics. All the while, middle-class family incomes were stagnant. Now they are on the rise. Could Trumponomics be the reason?
In April, real median household income reached $59,361, according to the
latest report from Sentier Research. That's up 2% since January, and is as high as it's been since February 2002. Expressed as an index, median household income was 100.9 in April, which is the first time this index has topped 100 since December 2008.
By comparison, this index was also
lower when Obama left office than when he came in — it stood at 99.2 in January 2009, and was 98.9 in January 2017. It was just 1.7% higher than when the recession ended in June 2009. Last year, incomes barely budged, Sentier data show.
Another way to look at it: median income has climbed faster in President Trump's first three months in office than it did during 7-1/2 years of Obama's economic "recovery."
Sentier Research uses monthly income data collected by the Census Bureau's Current Population Survey for its annual income and poverty report to measure month-by-month changes in median incomes. As the group's latest report states, this "provides an interim measure that tracks income changes on a monthly basis."
No doubt Democrats will interpret these recent gains in income as either a blip to be ignored, or as a sign that the economy has finally overcome the lingering effects of the terrible Bush recession.
The former is certainly possible, since three month's worth of data isn't much to go on. Still, it seems reasonable to conclude that this is an early sign that Trump's business-friendly economic approach — one that involves cutting taxes, deregulating the economy, repealing ObamaCare, and dialing back the size of government — is already paying dividends.
How could that be, since he hasn't actually implemented any of this core policies? While Trump has taken aggressive action to rein in the regulatory state through executive orders, legislatively his trophy case is pretty bare. ObamaCare repeal hasn't even made it to the Senate yet, and his tax reforms might not happen this year.
Well, we know that Trump's presidency, and the promise of a sharp turn away from the growth-suffocating policies of the past eight years, led to an immediate surge in optimism among businesses and consumers. It's possible that this has made businesses more willing to hire workers, and pay them more, than they otherwise would have. Plus, the stock market has responded with gusto to Trump.
Whether these household income gains continues depends on whether Trump can get his pro-growth agenda through a Congress that is filled with Democrats who are determined to destroy his presidency, and careerist Republicans who often seem afraid of their own shadow.