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Trump Takes Credit For Positive Jobs Report, Stock Market Climb

SCOTT SIMON, HOST:

Presidents like to take credit for good economic news. And this week, the U.S. economy seemed to have some. There was a new stock market milestone and a positive jobs report. President Trump quickly took to Twitter to brag the stock market is at an all-time high and that the mainstream media rarely mentions that. Well, we're mentioning it right now. NPR political reporter Danielle Kurtzleben joins us. Danielle, thanks so much for being with us.

DANIELLE KURTZLEBEN, BYLINE: Of course.

SIMON: So this week, the Dow Jones Industrial Average hit 22,000, an all-time high for the stock index. We've mentioned it again. And President Trump tweeted that doesn't just happen. Is he right? I mean, after six months in office, can the administration take credit for this?

KURTZLEBEN: Maybe in part but certainly not for all of it. I mean, look. You can see how investor might be inspired by the Trump administration, right? He is seen as business-friendly, as is the Republican Congress. They're talking about cutting corporate taxes. They're talking about cutting regulations. So that might make investors more bullish.

But you have so many other factors that weigh on the markets. For example, low interest rates. That might be sending stocks higher. Job creation is steady, like we were saying. And the global economy is doing OK. And one other thing to emphasize here, Donald Trump does have a lot of economic policies he wants to pass. You know, he's talked about infrastructure. They've talked about overhauling the tax code. Those things haven't happened yet.

SIMON: Who seems to benefit from the stock market climb right now?

KURTZLEBEN: Definitely rich people, I mean, is the short answer. You know, according to data from 2013 - and I find this astounding - the top 10 percent of households in terms of wealth owned 80 percent of the stocks in America. That's a huge discrepancy. And still others, you know, are invested via retirement accounts. So you have some of the middle class that is benefiting, but you have all of those other people that own no stock. They might see some indirect effects.

You know, a climbing stock market might boost economic confidence, which might boost spending, which might boost the economy. But the bottom line is that a lot of Americans just won't see benefits from this. You know, the way that Americans interact with the economy is through their paychecks. And the latest jobs report showed that unlike the stock market, wages really aren't climbing that quickly.

SIMON: There was a solid jobs report, as we note, along with this new stock market high. And I guess it's the longest sustained period of job growth that's on record. That must indicate a healthy economy?

KURTZLEBEN: Yes, absolutely. And, you know, the Trump administration understandably, you know, touts these numbers. But then again, presidents always take credit for economic numbers. President Obama did this. But presidents don't have a whole lot of control over the economy. So presidents do brag about this, not necessarily their doing. But more importantly, these numbers require context.

Yes, we have a long period of job growth. But in part, think about the deep hole that the recession put us in. It was bound to be a long slog out of that. And the question now is, how long can that job growth last? At some point, all of those jobs created have to push wages up. That just isn't happening yet.

SIMON: And one of the reasons is organizations follow stock prices is the idea that a healthy stock market indicates that companies are making money and they'll hire more people. But in this new high-tech economy, is that still the case?

KURTZLEBEN: I mean, there is evidence that companies invest more when stock prices go up. But yeah, like you said, it's not necessarily on hiring. They might spend on equipment, factories, technology. And some of that could mean fewer jobs. You know, some of that technology makes things more efficient. The bottom line is it's not an easy cause and effect.

In the recovery from the recession, stocks went up, jobs didn't go up nearly as quickly. And sometimes, a company's stock price goes up after it lays people off. Investors say, oh, you're saving money. You're cutting spending. Good for you. In other words, it's not very simple. The stock market is a broad economic indicator, but it is not at all nuanced.

SIMON: Danielle Kurtzleben. Thanks so much for being with us.

KURTZLEBEN: Sure. You bet. Transcript provided by NPR, Copyright NPR.