As the U.S. presidential election approaches, a recurring question about the country’s economy is whether it has been better under former President Donald Trump or under the current President Joe Biden.
Democratic candidate and current Vice President Kamala Harris claims, "Our economy is one of the strongest in the world by many indicators."
However, Trump's claim is that he made the U.S. economy the strongest in its history, and that the Biden-Harris administration has dismantled it.
To understand how the U.S. economy has fared under the two presidents, let’s look at some key indicators:
Economic Growth
Comparing the economic conditions during the terms of the two presidents is complicated due to the impact of the COVID-19 pandemic. However, both presidents can claim notable economic successes, even though it has become challenging to keep up with rising prices in recent years.
During the pandemic, many businesses closed, causing a significant drop in GDP. Once the pandemic’s severity decreased, the U.S. economy under Trump’s administration rebounded strongly, performing better than many Western countries in some cases.
This recovery trend continued under Biden as well. In terms of GDP, the U.S. positioned itself strongly among the G-7 countries for post-pandemic economic reconstruction. However, the economy during Trump's four-year term was not historically the strongest, as he claimed
From January 2017 to January 2021, the average annual GDP growth in the U.S. was 2.3%. This period included both the economic downturn caused by the pandemic and the recovery phase.
Under Biden’s administration, the growth rate so far is 2.2%, similar to Trump’s term.
In contrast, there were times before Trump and Biden, such as in the 1970s, when GDP growth rates were notable.
Inflation
Inflation has become a major issue in the current election campaign due to its rise. During the first two years of Biden’s presidency, inflation increased and reached a peak of 9.1% in June 2022.
Trump claimed, "The U.S. is experiencing the highest inflation ever." However, this claim was not accurate. Inflation over 9% was last seen in 1981. At that time, inflation was higher in several respects compared to Biden’s era.
Currently, inflation is around 3%. While this is still somewhat higher than when Trump left the White House, it has decreased from its peak. For instance, by August 2022, grocery prices had risen by 13.5%.
This was the highest increase in prices during Biden's administration. Since then, prices have stabilized somewhat, with a 1.1% increase from July 2023 to the present.
The global production and supply chain disruptions caused by the pandemic and the Russia-Ukraine war led to high inflation worldwide in 2021 and 2022, including in the U.S. Some economists argue that Biden’s $1.9 trillion "American Rescue Plan" contributed to rising prices by injecting money into the economy.
Employment
The Biden administration frequently highlights job growth as a major success.
In 2020, many people lost their jobs due to COVID-19. Before this, in Trump’s first three years as president, 6.7 million new jobs were added, covering 80% of the country’s labor force.
Since Biden's administration began in January 2021, 16 million jobs have been added to the economy.
President Biden claims, "This is the largest increase in jobs at any point during any president's administration in U.S. history." According to data from 1939, this claim holds true. Georgetown University economist Professor Mark Steirn says, “Even if Trump had won in 2020, many jobs would have been added. However, Biden’s American Rescue Plan played a significant role in accelerating the labor market recovery.”
In July, a lower-than-expected job growth rate raised concerns about a sudden downturn in the U.S. economy, affecting the stock market. However, the employment sector has remained stable since then.
Wages
During Trump’s presidency, wages for workers increased, at a rate similar to that seen during his predecessor Barack Obama’s administration. This trend of wage growth continued until the onset of the pandemic.
At the beginning of 2020, wages for workers rose rapidly, particularly among lower-tier employees, leading to an increase in average wages across all job levels.
Under Biden, average weekly earnings have increased, but high inflation has made it challenging for workers to adjust to rising prices.
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