The claim: The coronavirus pandemic has brought the U.S. economy back to its high point under Obama
Following economic turmoil induced by COVID-19, tens of millions of Americans have filed for unemployment benefits. The unemployment rate reached 4.4% in March, up from February’s 3.5%, the largest month-to-month increase since January 1975, according to the Bureau of Labor Statistics.
That figure is expected to jump dramatically in the coming weeks.
The virus has wreaked havoc on all aspects of the economy. On one day in late March, the Dow Jones Industrial Average fell more than 4.5% and — along with other drops since the end of February — erased all of the gains made since Trump took office in January 2017.
It has recovered to a degree since then; the Dow on April 22 was about 3,700 points above where it was at the start of Trump’s presidency, 23,476 versus 19,805.
Despite relief efforts at state and national levels, millions of Americans are facing economic hardships as businesses close and income slows or stops completely.
As tumultuous as the economy has been recently, some are comparing it favorably to where the U.S. was at the end of the Obama administration.
An Instagram post from Turning Point USA quoted conservative talk show host Rush Limbaugh as saying, “It took quarantining. It took many small businesses closing. It took canceling practically everything, to bring the USA economy back to the Obama high mark.”
Comparing economic numbers: Obama’s administration and the coronavirus
Before the coronavirus, the U.S. economy was doing well with an unemployment rate of 2.1%, the lowest in half a century. Now, there are 26 million unemployed Americans, with 4.4 million filing for unemployment insurance claims last week. The next update of the unemployment rate will come May 1.
When Barack Obama became president, he inherited the economy of the worst financial crisis since the Great Depression. In George W. Bush’s final year as president, 4 million jobs were lost and Obama’s first year saw the loss of another 4 million.
The unemployment rate was at 7.8% when Obama took office; it peaked at 10% in October 2009. By the time Obama left office, the unemployment rate was down to 4.8%, which is below the historical norm of 5.6%.
On top a severe increase in unemployment, the pandemic also has caused the stock market to drop.
On Feb. 12, the Dow hit an all-time high of at 29,551. The market fell from there, and on March 9 the Dow had its worst single-day drop in history, at that time, decreasing by more than 2,000 points.
By March 20, the falling market had erased all of the gains it made during Trump’s presidency, closing at 19,173.
When Obama became president, he inherited a Dow of 7,949 points. At the end of his presidency, the Dow was at 19,372, a more than 140% increase.
While Trump has been president, the DJIA before the coronavirus increased 43% before plunging. The market has recovered somewhat, and as of April the market is 19.6% above where it was when Trump took office in 2017.
Our rating: Partly false
While the coronavirus has walloped the U.S. economy, its full impact is yet to be seen and is projected to be much worse than the Obama administration’s economic “high mark.”
In technical black-and-white terms, the lowest unemployment rate under Obama was 4.8%, while the coronavirus has caused unemployment to reach 4.4% so far. Unemployment is a lagging economic figure, however, and the actual rate undoubtedly is many factors higher. That will be reflected in the coming weeks. This data makes the claim that the economy is still in a better place than during the Obama administration false.
The stock market has gone on a roller coaster ride. After hitting an all-time high, it dropped on March 20 below where it was at the end of Obama’s presidency. That Dow has recovered some of those losses and is still above where it was in early 2017. So it is true that the stock market is better, at publication time, than on Inauguration Day 2017.
However, the economy is in a bear market, while the Obama economy in January 2017 was in a bull market.
There are other indicators that speak to the health of the economy, including bankruptcies, foreclosures and defaults. Numbers for unemployment and changes in the stock market, though limited, are the most current available.