For Trump 2020, There’s More to the Story than Just the Stock Market

“But basing a campaign strategy on acceptable headline economic numbers while some parts of the nation are already in a recession is nothing short of tone deaf.”

The current economic struggles of America’s heartland, the states that made Donald Trump the 45th president, may imperil his re-election prospects this November. Whereas widespread concerns about the state of the whole economy this past summer cast a cloud over the president’s reelection prospects, headline economic numbers and sentiment have stabilized, and the public is increasingly bullish on Donald Trump’s odds of winning in November. Indeed, betting markets now give him a ~50% chance of occupying the White House for another four years. The system is undoubtedly thriving for urban-dwelling, service-sector employees with college degrees. As the “shareholder class,” their wages have risen, employment has increased, growth and measures like “earnings per share” have soared. For the rest of the country? Languishing from a drawn-out trade war with our largest economic partners, the manufacturing and agriculture sectors are nowhere near “great again.”

Manufacturing employment stalled nationwide in 2019 as total employment rose by 1.8 million, and data shows that Wisconsin, Michigan, Indiana and Ohio may have ended 2019 with fewer manufacturing jobs than when the year began. (However, there has been considerable manufacturing job growth in certain Western states since President Trump’s election, most notably in Nevada, Wyoming, and South Dakota.) Even if data revisions show this is not the case, anemic employment growth in labor-intensive industries in Midwestern states is probably not what “Make America Great Again” meant to many.

It is not just about the individual farms or manufacturing businesses that are hurting—the knock-on effect in towns and surrounding communities is not negligible since every dollar spent is another person’s earnings.

The first economic releases of 2020 demonstrate further deterioration in manufacturing, wherein manufacturing employment actually fell by 12,000 jobs in December vs. + 145,000 net non-farm positions nationwide. Gauges such as the ISM index, which is a comprehensive survey monitoring factory/industrial activity in the U.S., show the sector to still be in a contraction.