The performance of the economy is a recurring theme in the US presidential campaign. Has the US economy fared better under Donald Trump or Joe Biden?
“By many measures, our economy is the strongest in the world,” said Vice President and Democratic presidential candidate Kamala Harris.
Trump, the Republican candidate and former president, says he shaped the “greatest economy in the history of our country” and that the Biden-Harris administration has ruined it.
We have analyzed some key indicators to compare US economic performance under the last two presidencies.
Economic growth
Although the impact of the covid pandemic Making the comparison more complicated, both presidents have some notable economic successes, even though wages have barely kept up with price increases in recent years.
First, let’s look at the economic growth using the Gross domestic product (GDP), the value of all goods and services in the U.S. economy.
During Covid, there was a dramatic drop in GDP as many businesses and companies were forced to close their doors.
After the pandemic, the economy rebounded strongly under Trump and did much better than many other Western countries.
This has continued under Biden. The US has generated the strongest pandemic recovery within the G7, as measured by GDP growth data.
But During Trump’s four years, the US economy was not going through the best moment in its history, as the former president and Republican candidate often says.
Between January 2017 and the same month in 2021, the average annual growth rate was 2.3%. This period includes the slowdown and recovery of the economy as a result of the Covid pandemic.
Under the Biden administration, so far, this figure is 2.2%, so it is almost the same.
There have been periods in the past when GDP growth was significantly above average, such as the 1970s.
Inflation
The pace at which they are raising prices has been a big problem for the Democratic campaign.
Prices rose significantly during Biden’s first two years, peaking at 9.1% in June 2022Trump has said the United States has experienced “the worst inflation it has ever had.”
But that is not true: inflation was last above 9% in 1981and has been much higher than at several other points in U.S. history.
Inflation has now fallen to around 3%, but remains higher than when Trump left office.
Food prices, for example, rose by 13.5% during the year ending August 2022. This was the highest point under the Biden administration.
Prices have since stabilized, with food costs rising 1.1% between July 2023 and July this year.
The recent trend is comparable to that of many other Western countries that experienced high inflation rates in 2021 and 2022, as global supply chain issues, driven by Covid and the war in Ukraine, influenced the price increase.
But some economists say that the American Rescue Plan, Biden’s $1.9 trillion program passed in 2021 was also a key factor, as the injection of money into the economy led to prices rising even further.
Employment
The Biden administration has repeatedly highlighted the strong employment growth as an important achievement of his administration.
Before the massive Covid-related job losses of 2020, nearly 6.7 million jobs were added in the first three years of Trump’s presidency, according to nonfarm payrolls data, which covers about 80% of jobs in the labor force.
Since the Biden administration took office in January 2021, there has been an increase of almost 16 million jobs.
Biden claims this is the “fastest job growth of any time under any president in American history.”
That is correct, based on the data available since records began in 1939.
But the Democratic administration has benefited from the strong rebound in economic activity as the country began to emerge from lockdown that arose from the pandemic.
“Many of the jobs would have returned had Trump won in 2020, but the American Rescue Plan played a major role in the speed and aggressiveness of the labor market recovery,” says Professor Mark Strain, an economist at Georgetown University.
This plan passed under the Biden administration in 2021 was designed to help stimulate the economy after the pandemic.
Weaker-than-expected job growth in July raised fears of a sudden recession in the US economy and markets, which were hit as a result but have since stabilized.
Both administrations have pointed to low unemployment levels during their years in power.
Before the pandemic, Trump had a unemployment rate of 3.5%.
As in many parts of the world, Covid lockdown measures led to rising unemployment levels, which were around 7% when Trump’s presidency ended.
Under the Biden administration, unemployment continued to decline to a low of 3.4% in January 2023, the lowest rate in more than 50 years, but has since risen to 4.3%.
Wages
In terms of wages, during Trump’s presidency there was an increase, at a rate similar to that of his predecessor Barack Obama, until the pandemic hit.
The workers’ wages They rose in early 2020, during the Covid pandemic, but the sudden increase in wages is related to the likelihood that lower-paid workers were more exposed to being laid off, which increased the average wage of people still employed.
During Biden’s presidency, average weekly wages have grown, but they have struggled to keep up with rising prices caused by high levels of inflation.
When adjusted for inflation, average weekly wages are lower than when Biden took office.
Financial markets
He United States stock market It’s not necessarily a reflection of the broader economy, but many Americans have investments there, so its performance does matter.
The Dow Jones Industrial Average is a measure of the performance of 30 large companies listed on the US stock exchange.
The market hit record highs during Trump’s presidency but crashed as markets reacted to the pandemic, wiping out all the gains made during the Republican administration.
However, financial markets rebounded above pre-pandemic levels when Trump left office in January 2021.
Stock market growth has been on the rise under Biden, and while there have been recent swings, stocks have also hit record levels under his administration.
Graphics by Tommy Lumby.
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