2 Trump Economy Wins Could Actually Spell Trouble for 2019

Watch to see what happens with these critical factors.

The U.S. has now officially been led by President Donald Trump for two years, the second anniversary of his inauguration being Jan. 20, 2019. In those two years, America’s economic numbers have been quite reassuring: The unemployment rate declined from 4.7 percent in November 2016, down to 3.9 percent as of December 2018. And many states have experienced a significant increase in incomes since Trump entered office.

That said, Trump’s presidential term is only at its halfway point. With the ongoing trade war with China, the federal government shutdown and other sources of uncertainty, the next two years of Trump’s presidency should be watched closely. Here are two principal economic factors to watch as Trump heads into his third official year as president.

Income Inequality

The U.S. economy has recovered from the depths of the Great Recession, and the stock market has been on a long bull market for years now. In fact, in September 2018, both the Dow Jones Industrial Average and S&P 500 closed at record highs of 26,657 and 2,931, respectively.

Incomes, too, have increased over the last two years. Median household income grew by about 7 percent, from $53,889 to $57,652 currently, according to the U.S. Census Bureau. However, the mean household income has grown by 7.6 percent, because higher incomes pull the average upward.

Related: This Income Calculator Shows If You’re Actually in the Middle Class

Those figures are a symptom of the continuing growth in income inequality in the U.S. Over the same two-year period, the average income of the highest quintile of households rose from $193,457 to $209,307, an increase of 8.2 percent. And the average income of the top 5 percent grew from $344,707 to $376,587, an increase of 9.2 percent. In other words, it seems that the rich just continue to get richer.

Labor Force Participation Rate

The labor force participation rate is an important economic metric that measures the percentage of the civilian population that is employed or actively seeking employment. The reason why this economic factor is significant is its connection to the unemployment rate.

America’s low unemployment rate has been touted as a major win in the years following the Great Recession. But it needs to be tempered with data on labor force participation. Although the unemployment rate has been on a nine-year decline, the actual percentage of people who are in the labor force or actively looking has declined dramatically, from over 66 percent in January 2008, down to a low of 62.4 percent in September 2015, according to the Bureau of Labor Statistics. As of December 2018, civilian labor force participation is at 63.1 percent, which is a slight uptick from that low, but still low in the grand scheme of things.

Labor force participation affects unemployment because when people voluntarily remove themselves from actively seeking employment, they’re no longer counted as unemployed. As a result, this distorts the unemployment rate and makes it appear rosier than perhaps it actually is.

Click through to read more about the most and least recession-proof states.

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