November 4, 2024
As Americans prepare to cast their votes in the upcoming election, economic issues dominate the headlines. With inflation, job growth, stock performance, and the national debt at the forefront, analyzing the economic impact of the Biden and Trump administrations sheds light on each president’s approach and outcomes.
Inflation Surge: A Stark Contrast
Inflation has risen sharply under the Biden administration. Over the first 45 months of Biden’s term, inflation increased by 20.1%, translating to an annual rate of 5.4%, compared to a 7.1% increase, or 1.9% annual rate, during the same period under Trump. Biden faced historic peaks, with inflation reaching 9% in 2022—a 40-year high—before moderating to just over 3%. The Biden administration attributes the spike to COVID-19’s residual impact and global disruptions, including the Russia-Ukraine conflict, both of which fueled worldwide inflation (source: Bureau of Labor Statistics).
Job Market Performance: Recoveries and Resilience
Under both presidents, the job market displayed resilience, albeit in different contexts. Biden oversaw a 12% rise in employment, with average pay climbing 19% and unemployment dropping from 6.7% to 4.1%. These gains coincided with rising interest rates and efforts to combat inflation, making the labor market’s robustness notable. However, recent indicators suggest that job growth is beginning to cool.
Trump’s administration also saw impressive job metrics before the pandemic. Unemployment fell from 4.7% to a 50-year low of 3.5% by late 2019. Wage growth was strong, rising 15% through his term. However, the pandemic dealt a substantial blow, pushing unemployment to a record 14.9% in April 2020. Biden’s employment gains are largely part of the post-pandemic recovery, restoring jobs lost during the COVID-19 shutdowns (source: U.S. Bureau of Labor Statistics).
Stock Market: Strong Performance Under Both Administrations
Both administrations saw significant stock market growth, though Trump’s tenure saw slightly better results. The S&P 500 posted an annualized return of 16.3% under Trump and 12.6% under Biden. Despite predictions of a market crash if Biden were elected, the stock market has continued to hit record highs, driven largely by a tech-sector rally (source: S&P Dow Jones Indices).
GDP Growth: Post-Pandemic Surge and Stabilization
Trump and Biden both oversaw substantial GDP growth. Under Trump, GDP grew at an annualized rate of 2.7% during his first three years. However, the COVID-19 pandemic impacted the latter part of his term, resulting in an overall rate of 1.4%. Biden’s first year in office saw significant GDP growth, peaking at 5.9%, before stabilizing at 1.9% in 2022 and 2.5% in 2023. In 2024, GDP has shown steady growth, with annualized rates of 1.6%, 3%, and 2.8% in the first three quarters (source: Bureau of Economic Analysis).
Consumer Health: Lower Sentiment Under Biden
Consumer sentiment, a measure of Americans’ economic outlook, is currently lower than at any point under Trump, according to the University of Michigan’s survey. September’s personal savings rate was 4.6%, a significant drop from 7% in September 2019. During Trump’s term, the savings rate consistently remained above 5%, reflecting higher consumer optimism and disposable income (source: University of Michigan).
Gas Prices: Higher Highs Under Biden
Gas prices saw significant fluctuations under both presidents. The average cost of a gallon of gas fell from $2.37 to $2.28 during Trump’s term but reached an all-time high of over $5 in 2022 under Biden. Although prices have stabilized to around $3.10, they remain higher than during Trump’s administration. The Biden administration has attributed this rise to supply chain issues and the global energy crisis following Russia’s invasion of Ukraine (source: Energy Information Administration).
National Debt: Continuing to Climb
The national debt increased significantly under both administrations. Under Trump, the debt rose by 39%, from $19.95 trillion to $27.8 trillion by the end of his term. Under Biden, the debt has grown by 29% to $35.8 trillion. The U.S. ran a total deficit of $5.85 trillion from 2021 to 2023, compared to a $2.43 trillion deficit from 2017 to 2019, highlighting the fiscal challenges each administration faced (source: U.S. Treasury).
Key Background and Public Perception
The economy remains a top concern for voters, with recent polls indicating that Americans generally trust Trump more than Harris to manage economic issues. This belief persists even as the Biden administration points to record stock market highs and GDP growth. Misinformation on both sides has influenced public opinion: Trump has exaggerated Biden’s inflation impact, while Biden has mischaracterized the inflationary environment he inherited (source: Gallup, New York Times).
Analysis and Conclusion
Economic indicators under Trump and Biden tell a complex story of resilience and challenges. While Trump’s administration experienced strong job growth and controlled inflation pre-pandemic, Biden’s term has been defined by post-pandemic recovery and inflation pressures. Each president faced unique obstacles—Trump with the pandemic and Biden with inflationary pressures—and policy impacts continue to shape the economic landscape as Americans head to the polls.
Sources
- Bureau of Labor Statistics
- U.S. Bureau of Economic Analysis
- University of Michigan Consumer Sentiment Survey
- Energy Information Administration
- U.S. Treasury
