President Obama's Economic Report Card

Transition is underway in the White House, as president-elect and Republican candidate Donald Trump is set to assume the highest office in the country. Trump is set to be sworn in as the 45 president of the United States on January 20, which has traditionally been the swearing date since Franklin Roosevelt took the oath of office in 1937 in a move away from the March 4 date up 'til then.

Amid the transition, it is befitting to take stock of the condition of economy the incoming president would be inheriting, which takes us back to the question of how the economy had fared under Barack Obama.

Obama's Tenure

Obama was inaugurated as president for his first term on January 20, 2009, and he was elected for a second term in 2012, becoming the 17 individual to win two presidential elections. Thus, his presidential tenure ran for eight years (from 2009–2016).

Well-Behaved Economy

GDP, the broader measure of economic growth, saw a gradual improvement under Obama's presidency. After the economy went into a recession in 2008, with the effects of it lingering for a while, the economy did well to rebound from a 2.8 percent contraction in 2009 to 2.5 percent growth in 2010. The housing market meltdown in mid-2007 and sub-prime mortgage crisis in 2008 were the chief architects of the economic setback seen during the period. Officially, the recession ended in the second quarter of 2009, a little after Obama assumed office.

The subsequent recovery, though uneven, was orchestrated by several policy actions by several agencies, including the Federal Reserve, Treasury and the SEC. Though the economy never got around to achieve its trend-like growth, it did well enough to stay afloat in the eight-year period, Obama was at the helm.

Debt Overload

Notwithstanding the lukewarm economic recovery, the economy was straddled with a heavy debt burden. The debt to GDP ratio shot up to an estimated 104.8 percent in 2016 from 87.1 percent in 2009. The measure compares how much a country owes to how much it earns. In comparison to the rest of the nations, the U.S. ranks No. 11 in the measure, which is a dubious distinction.

Even this measure does not accurately reflect a country's debt servicing capability, as the government's income is only the tax revenue it collects and not the overall value of goods and services produced in an economy. Measured in terms of tax revenues, the debt servicing capability of the United States could be even worse.

Job Market: Bright Spot

Non-farm payroll gains have been robust, at least after the recovery got entrenched and gained some momentum. After bleeding jobs during the recessionary phase, the economy moved to a trajectory of sturdy job gains since late 2010.

The jobless rate held at sub-4 percent levels when the economy was hit with the Great Recession. The rate gradually increased through the recession and was at 9.5 percent when the recession ended in June 2009. The unemployment rate, after hitting a cycle high of 10 percent in October 2009, gradually improved over Obama's tenure. The December 2016 data showed the metric at 4.7 percent, which is close to its pre-recession levels.

Thus, Obama seems to have done well to steer an economy, he inherited as a weakling following the Great Recession, out of the doldrums. Although the economy hasn't been able to regain the glory of its heydays, it has definitely made strides in achieving a semblance of normalcy. All credits to Obama and his team of economic advisors!