The US has its lowest unemployment rate since Richard Nixon was in the White House 48 years ago. Wages are growing at their fastest rate in almost a decade. No other G7 country will come close to matching America’s growth rate this year.

All of which ought to be a concern for Donald Trump. If that sounds weird, consider the facts. When running against Hillary Clinton in 2016, Trump said he would put the world’s biggest economy back to work and so far he is doing so. He said he would repudiate or rewrite the “horrible” trade agreements his predecessors entered into and he has been as good as his word. The promise in his inauguration speech to put “America first” has been met in full.

Yet if the opinion polls are right (a big if), it won’t be enough for the Republicans to maintain their stranglehold on Congress. The Democrats are confident of winning the House of Representatives and think there is a chance of taking the Senate as well.

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And that matters, because this is as good as it is going to get during Trump’s first term. And if the Republicans are struggling during the midterm elections, it doesn’t bode awfully well for Trump’s hopes of winning another four years in the White House come 2020.

Last week’s jobs report illustrates why there is trouble ahead. Non-farm payrolls – the benchmark for employment in the US – showed a net 250,000 increase in October. Although the official unemployment rate of 3.7% understates the real level of joblessness, shortages of labour are putting upward pressure on pay.

This needs to be put into context. The economy has been growing for almost a decade and yet wages are growing only modestly once inflation is taken into account. Even so, the pick up in earnings growth to 3.1% last month will certainly be enough to trigger a fresh increase in interest rates from America’s central bank, the Federal Reserve, before the end of the year.

Trump is unhappy about the Fed’s hawkish approach to interest rates, with some justification. By American standards, the recovery from the financial crisis of 2008-09 has been modest, with none of the snap back in growth that traditionally happened after other postwar recessions. There is certainly a case for the Fed showing greater restraint; there are already signs that higher interest rates are slowing the housing market.

Trump has not helped matters. His public denunciations of the Fed make it hard for the central bank to desist from its planned tightening of policy without looking weak. What’s more, Trump’s loosening of fiscal policy through the package of tax cuts and spending increases announced at the end of 2017, has added to Fed concerns that the economy is at risk of overheating.

The most eye-catching part of Trump’s plan was a cut in corporation tax from 35% to 21%. Companies would keep more of their earnings, and this would unleash a wave of investment. Higher investment would boost the growth potential of the US economy, allowing it to expand faster without inflation picking up.

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Unfortunately, there is not much sign of this happening. US investment growth has accelerated slightly in 2018 and was 6.7% higher in the first three quarters of the year than in the same period a year earlier. It was actually growing faster in 2010-12 during the early stages of the recovery.

“Much of the growth we have seen this year is not from tax cuts but from higher world energy prices spurring a boom in oil and gas drilling”, says Dean Baker, senior economist at the Center for Economic Policy Research in Washington. “If we pull out energy-related sectors, the rise in investment would be even less.”

The growth boost from the tax cuts will gradually fade over the next 12-18 months just as higher interest rates really start to bite. To complete the picture, Trump’s protectionist measures will also be a drag on US growth.

In his book on the financial crisis and its aftermath*, Adam Tooze quotes a 2007 speech in which the then Fed chair Alan Greenspan said it did not matter how he voted in the 2008 presidential election. That was because the people of the US “were fortunate that, thanks to globalisation, policy decisions in the US have been largely replaced by global market forces. National security aside, it hardly makes any difference who will be the next president. The world is governed by market forces.”

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Greenspan could no longer make that statement today. Trump framed the 2016 presidential election as the battle between an economic nationalist fighting for the little guy against the consummate establishment insider in hock to Wall Street. There was an air of complacency about Clinton’s campaign that persisted right up to the moment of defeat. In office, Trump has challenged the idea that central banks always get things right; has made the case for more active use of fiscal policy and attacked the way in which globalisation is an elite racket. Although he is divisive and personally repugnant, there are progressives who support each of these policy stances.

Yet, Trump will be judged on his record and for all his bragging, he has not presided over a revitalised American economy. Companies are using their tax windfalls to buy back shares rather than invest. The trade deficit is rising despite protectionism. Economic growth will peak this year, ease back in 2019 and slow further in 2020, by which time unemployment will be on the rise in the Rust Belt states that were promised a new beginning. If Trump gets his second term, it will only be because the Democrats prove as inept as they were in 2016.

* Crashed: How a Decade of Financial Crises Changed the World, Adam Tooze, published by Allen Lane