The Fed Enabled a Record Expansion. Trump Is Taking Credit.


 President Trump is using the prepandemic economy to make a case for his re-election, highlighting time and again that unemployment rates fell to record low levels for Black and Hispanic workers in 2019, and that wages were climbing steadily under his watch.

He is also seeking to convince voters that he is rapidly returning America to that prosperous place following waves of pandemic-wrought job loss — fostering what he labeled a “Super V” rebound on Sunday — and that Joseph R. Biden Jr. would “destroy” the economy if he wins in November.

But Mr. Trump’s storyline about his economic track record, particularly what he showcased during his Republican National Convention speech last month, leaves out a crucial detail. Lucky timing and a patient Federal Reserve was pivotal in driving the strong labor market of the late 2010s, economists said. The Trump administration’s tax cuts and higher government spending temporarily nudged the economy, but the trade wars cooled it off, so the administration’s track record was mixed.

That complicated reality is unlikely to stop Mr. Trump from laying claim to the successes of the 2018 and 2019 job market. But voters who want to understand what drove such strong hiring and growth might be better off looking at the actions of the Fed and its chair, Jerome H. Powell, whom Mr. Trump nominated in late 2017 and then spent more than a year attacking on Twitter and in speeches.

“Both monetary and fiscal policy were stimulative, and it did lead to a strong labor market,” said Stephanie Aaronson, a former Fed researcher who is now at the Brookings Institution. Very low inflation “has given policymakers the latitude to try new things.”


That matters as more than a talking point: It could fundamentally shape the post-pandemic economy. The Fed has signaled that it intends to leave rates low to push unemployment down again, which could help return the labor market to strong levels. But the challenges posed by business closures and job reshuffling mean that elected officials, who have to tax and spending powers that the Fed lacks, may prove crucial to the speed and scope of the rebound.

“The single most important thing we can do here is to support a strong labor market,” Mr. Powell said in late August remarks. “That is more of an all-governmental society project,” and “to wait to the eighth and ninth year of the cycle to get those results — we can do better than that with other policies.”

To be sure, it is easy to overstate how strong conditions were before the pandemic struck.

About 83 percent of adults in their prime working years were in the labor force at the start of 2020, which was a marked improvement but still down from an 84.6 percent high in the late 1990s. Inequality prevailed. Wage growth had picked up from the expansion’s early years, but it remained shy of historical records.

But there is no doubt that the prepandemic job market was robust. Unemployment had declined to 3.5 percent, its lowest level in half a century. Prime-age workers who had dropped out of the labor market were surprising economists by applying for jobs. Unemployment for Black and Hispanic workers hit record lows, and pay was picking up for those who earned the least.

Now, the pandemic recession has thrown millions out of work, hitting disadvantaged groups especially hard. Black unemployment stood at 13 percent in August, for instance, compared to 7.3 percent for white workers.

 Uber Technologies Inc on Tuesday said every vehicle on its global ride-hailing platform will be electric by 2040, and it vowed to contribute $800 million through 2025 to help drivers switch to battery-powered vehicles, including discounts for vehicles bought or leased from partner automakers.

Uber, which as of early February said it had 5 million drivers worldwide, said it formed partnerships with General Motors and the Renault, Nissan, Mitsubishi alliance.

In addition to the vehicle discounts, Uber said the $800 million includes discounts for charging and a fare surcharge for electric and hybrid vehicles, the cost of which would be partially offset by an additional small fee charged to customers who request a “green trip.”

Uber said that vehicles on its rides platform in the United States, Canada, and Europe will be zero-emission by 2030, taking advantage of the regulatory support and advanced infrastructure in those regions.

The deals with GM and the Renault alliance focus on the U.S., Canada, and Europe. Uber said it was discussing partnerships with other automakers.

Uber’s plan follows years of criticism by environmental groups and city officials over the pollution and congestion caused by ride-hail vehicles and calls for fleet electrification.

Lyft Inc, Uber’s smaller U.S. rival, in June promised to switch to 100% electric vehicles by 2030 but said it would not provide direct financial support to drivers.

Uber said its goal is to reduce the overall cost of ownership for electric vehicles, which are currently more expensive than gasoline cars.

The company also released data on its emission footprint and said it would publish reports going forward.

Before the pandemic, electric cars accounted for only 0.15% of all U.S. and Canadian Uber trip miles - roughly in line with average U.S. electric car ownership. At around 12%, the share of plug-in hybrid and hybrid cars was roughly five times as high as the U.S. average.


Ride-hail trips overall account for less than 0.6% of transportation-sector emissions, according to U.S. data, but the total number of on-demand vehicles has significantly increased since Uber’s launch nearly a decade ago, with 7 billion trips last year, according to Uber’s February investor presentation.

Uber said its U.S. and Canadian trips with a passenger produce 41% more carbon dioxide per mile than an average private car once miles spent cruising between passengers are included.

Uber’s plans could be a boon to the auto industry. Stricter environmental regulation, particularly in Europe, is forcing automakers to invest billions to overhaul their operations while consumer demand for electric vehicles remains subdued. Uber is also working with BP, EVgo and other global charging providers to provide discounts and expand the location of charging stations for ride-hail drivers - generally considered the main hurdle to wider EV adoption. Beginning on Tuesday, all U.S. and Canadian Uber drivers in a fully battery-powered electric vehicle will receive $1 extra per trip, and an additional 50 cents in major U.S. cities if passengers choose to pay extra when booking a “green trip.”

Millions of Americans who were shut out of $1,200 coronavirus stimulus payments this year are about to get one more chance at a check.

Later this month, the IRS will begin mailing letters to about 9 million people who normally don’t file a federal income tax return but may be eligible for a payment.

Individuals who receive the letters must register at IRS.gov by Oct. 15 in order to receive their payment by the end of 2020.

A considerable amount of money is at stake. Individuals are eligible for up to $1,200 in stimulus payments — or $2,400 for a married couple — as well as $500 for each qualifying child under age 17.  

The IRS will be sending the letters to people who haven’t filed a return for either 2018 or 2019. Nevertheless, they’re entitled to a stimulus check.

Generally, these households aren’t required to file a tax return because they have low incomes — under $12,200 for 2019 if single or $24,400 if married and filing jointly — or they have no income. An individual is likely eligible if he or she is a U.S. citizen or resident alien, has a work-eligible Social Security number, and can’t be claimed as dependent on someone else’s federal income tax return, according to the agency’s website.

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How to tell if you are one of the many Americans still owed stimulus money

This round of letters from the IRS is the latest attempt by the agency to make payments to families who may have missed out on a check earlier this year.

Late last month, the IRS announced that 50,000 people would receive catch-up payments for money that was withheld due to their spouse’s unpaid child support.