Fact Check: No, America Wasn’t Heading Into a Recession Before Coronavirus
America’s economic surge prior to the pandemic is a matter of historical record—and thanks in no small part to Republicans’ pro-growth agenda and tax reform. That’s precisely why Democrats have been denying the success. Just today, one Democrat claimed that America was “heading into a recession” before the pandemic, noting that our economy peaked before the lockdown according to a report by the National Bureau of Economic Research. This is patently false.
A Peak Means a High Point
The National Bureau of Economic Research’s use of the word “peak” means what it always means: As a noun it means the pointed top of a mountain. As a verb it means “to reach a highest point.” NBER’s report said that the jobs reports from December through February “plateaued.” That plateau was a historically low unemployment number!
Growth Has Been Stronger Under President Trump For Good Reason
As Republican Leader Kevin Brady has said, “Remember [President Obama’s] ‘Summer of Recovery’? The vaunted ‘Stimulus’? Neither do economists, because they failed to jumpstart America’s economy due to a regulatory onslaught that choked our economy—especially for blue-collar workers, and ‘inversions’—companies leaving America—seemed like a monthly occurrence.
“Thanks to a unified Republican Congress and President Trump, we rewrote America’s outdated and uncompetitive tax code for the first time in 30 years. We created a tax code “built for growth”—the growth of jobs, paychecks, and the American economy.”
Economic Indicators Showed Strength Heading Into Pandemic Lockdown
The monthly jobs survey from the Bureau of Labor statistics was one of many economic indicators showing that the economy was surging. In February, unemployment rate was 3.6 percent, a historic low. Paychecks were growing faster in Jan at a yearly rate of 3.1 percent. Under Obama, wages never grew faster than 3 percent. The labor force participation rate ticked back up to its highest point since 2013. That means people are moving off the sidelines and into good-paying jobs.
Hispanic Women Were Having a Record Economic Year
From the New York Times: Hispanic women have emerged as the biggest job market winners in an economy that has now grown for 121 straight months, assuming data released in coming months confirms continued growth. Employment rates for Hispanic women between 25 and 54, prime working years, have jumped by 2.2 percentage points since mid-2007, the eve of the Great Recession. That’s the most of any prime-age working group. Black women came in second, adding 1.6 percentage points.”
In Fact All Women Were Winning
2019’s economic numbers showed the Trump economy, particularly after passage of the Tax Cuts and Jobs Act, has seen great increases in opportunities and prosperity for American women. Women’s participation in the workforce today is steadily increasing. Women’s wages are rising at a faster percentage rate than men. Women of color are winning the jobs race.
Economic Confidence Was Soaring
According to Gallup, U.S. economic confidence hit a 20-year high in January.
Experts Agreed that the Economy Was Strong and Coronavirus is a Health Crisis
Prior to the pandemic, the Federal Reserve repeatedly said that the economy, despite uncertainty in the global economy, had very good economic fundamentals. As coronavirus spread, the Fed was unequivocal that we were going through is a health crisis that induced a forced economic shutdown – but not an economic crisis. Goldman Sachs also noted that, “This is almost certainly the deepest recession” since World War II, Jan Hatzius, chief economist at Goldman Sachs, wrote in a note Monday. While deep, “it is almost certainly also the shortest recession” since the war as well, Hatzius added.
Bottom Line: Let’s stick to the facts. Pro-growth policy ensured the American economy was strong entering this health crisis, and pro-growth policy will help ensure this recession is as short as possible. Let’s help Americans get back to work as we reopen the economy.