The U.S. economy has witnessed highs and lows under both Donald Trump and Joe Biden's administrations. Trump led the country from a stagnant economy to a powerful one by introducing substantial tax cuts and increased spending, resulting in rapid growth and job creation until the pandemic hit and caused mass unemployment. Biden, on the other hand, encountered a struggling economy amid the Covid-19 pandemic. His considerable government spending and investments took the country on a swift path to recovery, creating more than 15 million jobs, bringing around manufacturing, and uplifting startups.
To assess under which presidency the US economy thrived the best, let us have a look at these key indicators:
Economic growth in a country is measured by its GDP- Gross Domestic Product- which assesses the total value of goods and services in the US economy. As several businesses were shut down during the COVID-19 pandemic, the US GDP experienced a significant downfall. However, post-pandemic, under Trump’s governance, the US economy strongly ricocheted, surpassing many other Western nations. Under the Biden administration, this robust recovery trend has thrived, with the US becoming an example of how it made the most phenomenal pandemic comeback in the G7 based on GDP metrics.
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Nevertheless, as frequently claimed by Trump, under his administration, the USA did not witness the best economic performance. The average annual growth rate between January 2017 and January 2021 was only 2.3%, which also includes the pandemic’s impacts. Under the Biden administration, the current average annual growth rate is 2.2%, which is almost the same.
The 1970s was a landmark period in the history of the US economy when GDP growth remarkably outstripped the averages under both the Trump and Biden administrations.
The ongoing campaigns for the 2024 Presidential Election have seen one common topic making rounds of debate and discussions- the rising inflation in the country. During the first two years under the Biden presidency, inflation in the States soared considerably, reaching its highest point at 9.1% in June 2022. Although Trump claims that inflation in the country has never been higher, it last exceeded 9% in 1981. Since then, inflation has been high at other points in US history.
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Currently, inflation has plummeted to around 3%, which is still higher than when Trump last attended office. For instance- grocery prices skyrocketed by nearly 13.5% for the year ending in August 2022. However, the prices have remained stable since then, ascending to only 1.1% from July 2023 to July 2024. Thai trend is compatible with many Western countries which witnessed soaring inflation caused by disruptions in global supply chains due to the Covid-19 pandemic and the Russia-Ukraine conflict.
According to some economists, Biden’s 2021 enacted $1.9 trillion American Rescue Plan has also contributed to the rising inflation.
Rapid growth in job creation and employment are the two things that the Biden administration has repeatedly highlighted as a key achievement. Based on non-farm employment data which covers almost 80% of the workforce, Trump’s initial three years, before the Covid-19 pandemic, witnessed an addition of around 6.7 million jobs. Job numbers have further increased by almost 16 million after Biden joined office in January 2021.
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Biden claims that the development in employment and growth in job creation has never been this high under the administration of any previous US president. This data is even supported by records that have been kept since 1939. However, his administration has benefited from a strong recovery as the economy rebounded from pandemic restrictions. Professor Mark Strain of Georgetown University says that although several jobs would have been resuscitated if Trump was re-elected, Biden’s American Rescue Plan considerably amped up the recovery process.
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When July’s job growth failed to meet expectations, many concerns arose about an economic slump in the country impacting stock markets. However, the figures have since stabilized. Both the Trump and Biden administrations have highlighted the low unemployment rates in the country. Trump achieved a 3.5% unemployment rate before the pandemic, which was thwarted due to COVID-19 but fell to about 7% by the time he exited office. On the other hand, under Biden’s presidency, unemployment dropped to 3.4% in January 2023, the lowest in over 50 years, though it has since risen to 4.3%.
Under the Trump administration, wages increased, although it was still similar to what was under his predecessor, Barack Obama’s presidency. This was until the pandemic hit. During the COVID-19 Pandemic, at the beginning of 2020, wages soared as lower-paid workers were more likely to lose their jobs. This raised the average wage of people who were still employed.
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Average weekly earnings have continued to witness growth under the Biden administration. However, this increase is not at par with the rising prices, which have been driven by inflation. When adjusted for inflation, average weekly wages are lower than they were when Biden took office.
The US Stock market does not always act as a marker of the US Economy. However, its performance carries significant importance for American investors. The Dow Jones Index, which follows thirty leading companies on the US stock exchanges, rose to an all-time high under Trump’s presidency, before slumping as a result of market reactions to the pandemic. This drop erased all the gains that were made during his term. By the time Trump exited office in January 2021, the market boomeranged to pre-pandemic scores.
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Under the Biden administration, the US stock market has experienced a record high. This continuing growth has been a key aspect of the Biden administration’s economic performance.
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