Both presidents are touting their contributions to the U.S. economy ahead of the 2024 election. But how do they stack up?
The economic performance of both presidents was defined by the pandemic and its aftershocks. The coronavirus crisis has upended the job market, triggered the highest inflation in decades and increased the federal debt by trillions of dollars.
The economy today is vastly different than it was in 2017, when President Trump took office. But the data shows how each administration left its mark. In less than three years, Biden added 14 million jobs, brought black unemployment to an all-time low, and reduced student loan debt by billions of dollars. Trump, on the other hand, presided over an era of low inflation, low interest rates and low gas prices.
Below are 12 charts that illustrate the current state of the economy and the state of the economy under the Trump administration.
A surprisingly strong labor market is perhaps the White House’s biggest victory. In a sense, this conflict was inevitable. Biden took office at a time when millions of people are still out of work due to the pandemic. Still, rapid job growth in recent years has exceeded economists’ expectations and fueled massive economic growth.
Even more noteworthy is that the labor market remains strong despite the Federal Reserve’s aggressive efforts to slow the economy. As long as Americans were employed, they could withstand inflation and continue spending, allowing the economy to grow.
created by the employer 14 million Under the Biden administration, there were an average of more than 400,000 job openings per month. However, the pace of job creation has slowed recently, with 199,000 new jobs created in November.
By contrast, the economy added an average of 176,000 jobs per month during the first three years of Trump’s presidency, before more than 20 million jobs were suddenly eliminated due to coronavirus-related shutdowns and layoffs.
Barring the coronavirus pandemic for most of 2020 and 2021, the national unemployment rate remained low throughout both the Trump and Biden presidencies.
The unemployment rate has declined during the Trump administration, hitting a half-century low of 3.5% in early 2020, just before the pandemic. During President Biden’s term, the unemployment rate has further edged down, reaching 3.4% at the beginning of this year. Currently, 3.7%.
Employment growth over recent years has been particularly good for workers who are generally underrepresented in the labor force. Unemployment rates for Hispanic workers, black women and people with disabilities all hit record lows under Biden’s watch.
The black unemployment rate, which President Trump touted as being credited with improvements during his presidency, declined under both administrations, but hit an all-time low earlier this year during the Biden administration.
For the most part, the U.S. economy has expanded at a steady pace under both the Trump and Biden administrations. Gross domestic product, a measure of all goods and services produced in the country, has increased by about 22% since Biden took office. That compares with a 14% rise under President Trump, when the pandemic sent the economy into a sharp, sudden recession. Still, thanks in part to trillions of dollars in stimulus, the economy recovered quickly and was growing again by the time President Trump left office.
Now, under the Biden administration, the economy has recorded five consecutive quarters of growth following six months of stagnation last year. The recent economic expansion has been driven by high consumer spending, which accounts for about 70% of the economy, and new infrastructure and green energy projects spearheaded by the Biden administration. But economists say the current economic growth rate (5.2% annualized as of September) is unsustainable and many expect growth to slow next year.
The president has little control over gas prices. But this is one area where the Trump era was better for Americans, and it may help explain some of the bleak feeling Americans are feeling right now.
Gasoline prices have been on a dizzying roller coaster since 2020 due to pandemic-related issues, the war in Ukraine, and surging demand. Gasoline prices more than doubled between April 2020 and April 2022, from $1.84 to $4.11 per gallon. It reached an all-time high of nearly $5 a gallon in June 2022, but has since fallen. Analysts predict that a combination of increased production and slowing demand could push gasoline prices below $3 a gallon by the end of the year.
Gasoline prices have a direct impact on how Americans view the economy, and high gas prices have led to lingering pessimism for much of Biden’s presidency.
Homeownership is one of the biggest ways Americans create wealth, and recent price increases have become a double-edged sword. While many first-time home buyers are locked out of the market, those who already own a home are benefiting from rising property values.
But overall, homeownership has become much less accessible under the Biden administration. Home prices have soared during the pandemic, rising an astonishing 49% from spring 2020 to fall 2022. These rising costs have pushed home prices to record lows, according to Goldman Sachs. The median home sales price is now $431,000, lower than last year’s $480,000, but still well above pre-pandemic norms.
Mortgage rates have more than doubled in the past two years, from about 3.1 percent to about 7 percent, making home purchases much more expensive and negatively impacting the market. However, prices remain high as demand for housing exceeds supply.
Inflation has been a long-standing challenge for the Biden administration. The rapid rise in prices after the pandemic has led to the highest inflation in more than 40 years. Americans are struggling with rising costs for just about everything, including groceries, gasoline, cars, and health care.
Although inflation has recently fallen from its peak last summer, prices are still about 3% higher than a year ago. Many Americans say high costs are tainting their view of the economy, and voters consistently rank inflation as their top economic concern.
The president has little authority over interest rates. The chairman and governor of the Federal Reserve are appointed by the president and confirmed by Congress, but the central bank operates independently.
But the Fed’s actions have far-reaching effects on the economy. During President Biden’s term, the central bank raised interest rates 11 times as part of its efforts to curb inflation. The bank controls the federal funds target range (the interest rate that banks use to lend money to each other overnight), which is between 5.25% and 5.5%, the highest level in 22 years. There is.
Every time the Fed raises interest rates, or hints at the possibility of raising them, it creates a ripple effect throughout the economy that increases borrowing costs for all types of loans, including mortgages (currently about 7%), personal loan (12 percentdepending on bank rates) and credit cards (20% or more).
Americans have less purchasing power than before. The beginning of Biden’s term. Household income has experienced significant fluctuations since 2020 due to a decrease in economic stimulus funds and rising prices. Still, with wage growth outpacing inflation, many Americans are poised to end 2023 in a better position than they were a year ago.
By comparison, during the Trump era, Americans’ purchasing power steadily increased until the pandemic began. Overall, real disposable income, or what Americans have left after taxes and inflation, increased by about 10 percent between January 2017 and January 2020.
The stock market rose rapidly during the Trump presidency and continued to rise under the Biden administration. After a period of weakness last year on expectations of higher borrowing costs and higher volatility, stocks have rebounded on optimism that the Fed is done raising interest rates. The Dow Jones Industrial Average and Nasdaq hit all-time highs this month, and the Standard & Poor’s 500 is likely to follow suit.
During his presidency, Trump closely monitored stock market trends and often touted his successes on social media. He also warned Americans that a Biden presidency would result in a “stock market crash like we’ve never seen before.”
That’s not happening — the president was quick to point that out. “Good for you, Donald” Biden recently fired back at X.
Student loan balances have been increasing for nearly 20 years now.
Biden entered office vowing to ease the debt burden on students and graduates. And while his most ambitious plans, including a $400 billion amnesty plan, have been blocked by Republican lawmakers and the Supreme Court, his administration is finding ways to provide relief.
To date, the White House has canceled approximately $132 billion in student loan debt for more than 3.6 million Americans. It also increased federal Pell grants for low- and moderate-income students, helping to ease student debt burdens. As a result, student loan balances have continued to decline for six months. Americans had $1.74 trillion in student loan debt in October, down from a record high of $1.77 trillion at the beginning of the year.
Despite a strong economy, Americans appear to be downright disappointed when it comes to finances during Biden’s term. In June 2022, when gasoline prices reached an all-time high, consumer sentiment fell to an all-time low. Sentiment has rebounded somewhat since then, but remains lower than it was under President Trump.
But even though they say they’re feeling tough about the economy, Americans continue to spend big. Spending on a variety of goods and services, including cars, travel, and dining out, has fueled the economy and helped sustain growth.
The federal deficit peaked under Trump, but both Mr. Trump and Mr. Biden increased the national debt by trillions of dollars. The national deficit, the difference between what the government brings in and what it spends, has increased with each Trump term. Significant tax cuts following the government’s response to the pandemic have increased the national debt to an unprecedented $7.8 trillion.
Since then, the budget deficit has narrowed during President Biden’s first two years in office. But this year it rose again by 23%, leaving a $1.7 trillion shortfall.
This widening budget deficit, combined with political dysfunction in Congress, is causing alarm among rating agencies that track the nation’s fiscal health. Fitch Ratings stripped the United States of its highest AAA score in August. In November, Moody’s lowered its outlook for the U.S. government debt, warning that “continued political polarization” threatened the nation’s fiscal strength.