No, US economic growth is not overtaking unemployment for the first time in a century
US president Donald Trump wrongly claimed in a tweet Monday that, for the first time in a hundred years, the American gross domestic product growth overtook the unemployment rate. This happened numerous times since 1918, and more recently in early 2006.
The GDP Rate (4.2%) is higher than the Unemployment Rate (3.9%) for the first time in over 100 years!— Donald J. Trump (@realDonaldTrump) 10 septembre 2018
The current president, who regularly boasts his track record at a time when the American economy is in good shape, asserts that the GDP rate is “higher” than the unemployment rate in the country “for the first time in over 100 years.”
By analyzing M. Trump’s comparison of a quarterly data (GDP growth at an annual rate) with a monthly data (unemployment rate), we can see that his statement is still false, as shown by this AFP chart based on data by the Bureau of Economic Analysis and the Bureau of Labor Statistics, two reference institutions on employment and the economy.
In this chart, all red dots located above the blue curve represent quarters when the annual rate of GDP growth exceeded the monthly unemployment rate.
This scenario is currently happening for the first time since the 2008 financial crisis. Last time, throughout the first three months of 2006, the US unemployment rate swayed between 4.7 percent and 4.8 percent of the active population, while the GDP growth had reached 5.4 percent at a yearly rate.
This also occurred on several occasions during Bill Clinton’s terms (1992-2000), and many times between 1948 and the early 1980s.
Over the course of 1950, for instance, the quarterly growth rate of the American GDP swayed between 7.9 percent and 16.7 percent. Throughout the same time period, the unemployment rate decrease from 6.5 percent of the active population to 4.3 percent. Therefore, during that year, the US GDP growth was consistently higher than the unemployment rate in the nation.