With Impeachment Unfolding Amid a Booming Economy, What Will Voters Prioritize?

WASHINGTON — President Trump was greeted Friday morning with news of a blockbuster jobs report, showing that employers added 266,000 jobs in November and the unemployment rate fell to 3.5 percent, its lowest level since 1969.

The country’s economic condition, which has historically aligned with a president’s re-election chances, should be helping Mr. Trump sail into a second term. But what should be a top indicator of Mr. Trump’s performance as president came a day after Speaker Nancy Pelosi called on the House to begin drafting articles of impeachment against him.

It didn’t take long for Mr. Trump to tie the two together. “Without the horror show that is the Radical Left, Do Nothing Democrats, the Stock Markets and Economy would be even better, if that is possible,” he wrote on Twitter. “And the Border would be closed to the evil of Drugs, Gangs and all other problems! #2020.”

Such is the Trump presidency: a leader who is presiding over a record-long economic expansion that has proved more durable than anyone predicted while defending his fitness to hold office.

With 11 months to go before the 2020 election, a polarized electorate is dividing itself by which story line it views as more pertinent — the president’s potential abuse of power, or the comfort of a steady paycheck credited to his leadership.

The Trump campaign is betting that Mr. Trump’s rote denials of pressuring the Ukrainian president to investigate his political foes will eventually sway enough voters to put the entire impeachment issue to the side.

“Trump having a perfectly acceptable phone call with the president of Ukraine doesn’t affect anybody’s daily life,” said Brad Parscale, the president’s campaign manager. “A good job with a bigger paycheck does.”

But Mr. Trump’s presidency is also testing conventional wisdom that a good economy is all voters need to keep the status quo rather than seek out change.

“Were it not for the other factors of the Trump presidency, it should be by far the most popular presidency in history, based on the economics,” said Tony Fratto, founder of Hamilton Place Strategies, a public affairs firm, and a former spokesman for the Treasury Department under President George W. Bush.

Instead of enjoying anything close to overwhelming popularity because of the economy, Mr. Trump’s national approval rating has remained low, dropping about two percentage points to 41 percent since the Ukraine story broke. One problem with Mr. Trump’s campaign message is that the economic expansion started before the president assumed office, causing many voters to take it for granted.

“At this point, voters may think this is just the normal economy,” Mr. Fratto said. “That gives them the luxury to focus on other things, like the behavior of the president.”

Another factor is also at play: While Mr. Trump routinely talks up the economy, he is far more passionate when lashing out at Democrats over the impeachment inquiry, or simply riffing about the news of the day, than when discussing the stock market and unemployment rate. His off-the-cuff comments often overshadow his dutiful recitations of gains.

At the White House on Friday, Mr. Trump noted in a monotone voice that the unemployment rate was “at the lowest rate, as I told you, in many years and in many ways I think we probably very soon say historically.”

He only seemed to come alive when discussing rolling back energy standards on light bulbs. “The new bulb is many times more expensive and I hate to say it, it doesn’t make you look as good. Of course, because being a vain person that’s very important to me,” he said, noting that it “gives you an orange look.”

Mr. Trump’s penchant for steering the conversation away from the economy is frustrating for many Republicans and business leaders, given America is powering through a record 11-year expansion. Employers have hired 2.2 million people over the past 12 months, a surprisingly robust performance at a time when unemployment is at 3.5 percent — its lowest in half a century.

Those gains have often come in spite of Mr. Trump’s policies, not because of them. And it remains an open question how long the pace of growth can continue.

The president’s globe-spanning trade war has put businesses on edge and slowed their investment. Manufacturing has dipped into outright contraction as weak global growth and geopolitical tensions weigh on exports.

Mr. Trump’s economic advisers have been keenly aware of the need to keep the economy humming as the president heads into a re-election year. “America is working and not only is America working, America is getting paid after taxes,” Larry Kudlow, a top economic adviser, said on Friday. “I don’t see any end to it right now. What I see is more strength.”

Administration officials have been exploring ways to ensure the expansion continues, including tax cuts aimed directly at the middle class. The White House has not indicated which income brackets would see a lower rate but Mr. Trump is expected to back a plan that would make permanent the individual tax cuts included in the tax package he signed in 2017. Those cuts are now slated to expire in 2025.

Mr. Trump has dangled the additional tax cuts as a reason voters should back him and Republican House candidates, warning that the economy — and retirement accounts — will tank if Democrats win the White House.

“If any of these people that I’ve been watching on this stage got elected, your 401(k)’s would be down the tubes,” Mr. Trump said in October. “You’d destroy the country.”

At rallies and speeches, he has told supporters, “you have no choice but to vote for me,” citing dire economic consequences of electing any of the Democratic candidates, whom he has tried to broadly portray as a band of extreme socialists.

So far, the economy is complying with Mr. Trump’s re-election message.

Average hourly earnings increased 3.1 percent in the year through November, a moderate but sustainable pace. Bigger paychecks have given consumers more cash to spend on everything from restaurant meals to holiday shopping, helping to power the economy.

Such a strong economic track record should help insulate Mr. Trump from attacks by Democrats claiming that they can do a better job managing the economy. So far, his rivals have floated plans that they say would spread wealth more equitably by raising taxes on corporations and the rich to finance universal health care and free college tuition.

But Democrats have found a ripe opening in impeachment to hone their attacks on Mr. Trump.

“The Constitution makes clear no one is above the law,” Senator Elizabeth Warren of Massachusetts said in a recent interview with MSNBC. “I hope we hold him accountable.”

Even without the impeachment drama, it’s not clear that the economy will continue complying with Mr. Trump’s campaign messaging.

Mr. Trump said this week that trade talks with China may last past the 2020 election, rattling stock markets around the world. Additional tariffs on Chinese goods are slated to take hold Dec. 15, and it is unclear whether they will be delayed. Global growth remains fragile, and while many economists expect it to accelerate in 2020, that forecast could be upended by an escalation in the trade war.

“We’re really in terra incognita here, I think, in terms of what’s possible next year, just given all of the geopolitical factors at play,” said Ernie Tedeschi, policy economist at Evercore ISI.

Mr. Trump has jawboned the Federal Reserve to cut interest rates more aggressively, blaming the central bank for not doing enough to propel the economy. The Fed cut rates three times in 2019 as it tried to insulate the economy against trade tensions and slowing global growth, but it is unlikely that it will cut borrowing costs again without good reason.

For now, Mr. Trump is hoping his economic message wins out over impeachment, an issue campaign advisers predicted would be firmly in the rearview mirror by November.

“Stock Markets Up Record Numbers,” Mr. Trump tweeted on Friday, adding: “It’s the economy, stupid.”

Alan Rappeport contributed reporting.

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