Proving Grounds:
George W. Bush's 1st Term Scorecard

By. J. Taylor Brown
Stock Trader's Almanac Investor

       As the 54th presidential administration draws to a close, it is prudent for investors to take a minute and look at the economic metrics of George W. Bush's first term.

The Good

The credit markets have had a robust four years. Historically, over four-year presidential terms, the 10 Year Note has had an average yield increase of 4.5%. Under Bush, the note's yield was down 26.6% (lower yield-higher price), barely eking out his father for the title of "Bond President." Corporate bonds had their second best administration, topped only by FDR during the New Deal.
       Bush also receives good grades in terms of the Consumer Price Index and Producer Price Index. The PPI was up 6.9% during this administration which is 6.3 percentage points less than the historical norm. Bush's CPI numbers are even more impressive, tallying the fourth best term ever with only a 9.1% increase over his four years, which is 7.3 percentage points less than the norm.
       Going hand in hand with the Bond Market strength were the good inflation numbers under Bush. The rate of inflation has declined 0.5% under Bush, compared with an increase of 0.2% during the last 19 presidential terms.

The Bad

       The stock markets have had a miserable four years. The Dow has slipped 4.4% under Bush's tenure, the S&P gave back 14.9% and the Nas coughed up a whopping 23.3%. Looking at the numbers, it wasn't the Post-election year that contributed the bulk of these loses, but it was Bush's Mid-term election year that was the most damning.
       The economy as a whole as measured by GDP has underperformed the average by 2.3 percentage points, giving Bush the third worst administration since Truman while besting only his father and Nixon's 2nd term.

The Ugly

       The Jobs data is ghastly. Bush is the only president since WWII to actually have a net decrease in jobs, utilizing the non-farms payroll data, with a total drop of 0.7% during his stewardship. The next closest performance was Bush 41 with a net increase of 3.0%. Bush's best has been the current year with a gain of 0.7%, putting him 0.4% ahead of his dad's election year (lost) and tying him with Carter's (lost).
       Editor's Note: J. Taylor Brown is Vice President of the Hirsch Organization, publishers of the Stock Trader's Almanac Investor, 184 Central Ave., P.O. Box 2069, Old Tappan, NJ 07675, 1 year, 12 issues, $295. For more information on the Stock Trader's Almanac Investor visit the web site at www.stocktradersalmanac.com.