U.S. ECONOMY
The Economy Under Trump vs. Biden
Updated October 12, 2024, 12:01 am EDT
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Covid slammed into the economy in Trump’s final year. Jobs soared under Biden, but so did inflation.
Real gross domestic product, annual change
Former President Donald Trump is running on his economic record from his four years in office. Vice President Kamala Harris isn’t at the helm at the White House, but President Biden’s record is, in effect, hers.
Americans have consistently given Trump better marks on the economy than Biden—to the frustration of Biden’s advisers, who complain the president hasn’t gotten the credit he deserves. While recent polls suggest Harris is making up ground on the economy, she still trails.
So just what does the data show on how Trump and Biden performed?
C omparing exactly how the economy has done during the Biden administration versus the Trump administration is less than straightforward. The pandemic severely disrupted the country during Trump’s last year in office, and into the Biden years. Both men might like a pass or two on some aspects of how things fared under their watch. Some caveats probably are in order, and the president’s ability to influence something as large and complex as the U.S. economy is often limited. That said, both were in charge, and their economic records are their economic records.
Biden vs. Trump on GDP
Gross domestic product is the broadest measure of the economy’s performance, and during Trump’s first three years in office, it was pretty good: Inflation-adjusted, or real, GDP grew at a 2.8% annual rate from the fourth quarter of 2016 to the fourth quarter of 2019. Then the pandemic hit and GDP got whacked, bringing the annual rate for his whole term to 1.8%.
G DP under Biden has been better. This is in part because it was still rebounding strongly during his first year in office. From the end of 2020 through the second quarter of this year, real GDP has grown at a 3.2% annual rate. Its level is higher than what economists before the pandemic thought it would be now.
Put another way: GDP grew 7.6% over Trump’s four years in office. It has grown 11.8% so far during Biden’s tenure.
Economists estimate that the third-quarter GDP report, due from the Commerce Department at the end of October, will also be solid. At this point, it looks as if GDP under Biden will post the strongest growth of a presidential term since former President Bill Clinton’s final four years in office.
Biden vs. Trump on inflation
While GDP growth has been good under Biden, inflation has been absolutely horrible.
During Trump’s first three years in office, inflation was muted. And when the pandemic first hit, it ran even colder. From January 2017 to January 2021, the Labor Department’s consumer-price index rose a cumulative 7.8%.
Under Biden, prices skyrocketed. And while inflation—the pace at which prices are rising—has lately cooled, Americans are still living with those past price hikes. Through September, consumer prices are nearly 20% above their January 2021 levels.
Not since Ronald Reagan’s first term, when consumer prices rose 21%, has a president presided over such high inflation. And Reagan had the advantage that during the single term of his predecessor, Jimmy Carter, inflation was much hotter, with prices rising 49%.
Just as the big drop in GDP in 2020 was more a reflection of the pandemic than of Trump’s leadership, the spurt in inflation during Biden’s tenure is in part a reflection of the supply-chain snarls brought on by the pandemic, and by the jump in oil prices brought on by Russia’s invasion of Ukraine. One indication of this is that inflation elsewhere also shot up. Prices in the eurozone, for example, are about as elevated relative to the start of 2021 as they are in the U.S., while the eurozone’s economic growth has been far slower.
But few Americans are chatting about prices with their counterparts overseas. Instead, they are living with American inflation, and this is a major reason polling shows Biden gets poor marks on the economy, despite the strength in the jobs market.
Biden vs. Trump on jobs
During Trump’s first three years in office, through February 2020, the economy added 6.7 million jobs. That March and April it lost 21.9 million jobs. Although the labor market began bouncing back that May, at the end of 2020 there were 2.7 million fewer jobs than at the end of 2016.
Under Biden, job growth has been strong. As of September, the U.S. has added 16.2 million jobs since January 2021.
That number might get revised down slightly. But revisions or not, as of September there hasn’t been a stronger annual pace of job growth over a single presidential term, measured by percentage, since Carter’s term ending in January 1981.
Job gains during Biden’s administration have been stronger than what many economists thought the economy could generate. Shortly before the pandemic struck, the Congressional Budget Office estimated there would be an average of 155.1 million jobs in the third quarter of 2024. There were over three million more than that.
Biden vs. Trump on unemployment
The unemployment rate charted a similar path to jobs over the two administrations. It fell from 4.7% when Trump took office to 3.5% on the eve of the pandemic, shot to its highest level on record, and was at 6.4% in January 2021.
Under Biden, it fell from the 6’s into 5’s and 4’s. Last year, it matched its 70-year low of 3.4%. But it has since climbed to 4.1%.
Biden vs. Trump on household income
Census Bureau figures show that household incomes grew strongly during Trump’s first three years in office, and then fell in his final year, though there are pandemic-related distortions here as well.
The Census Bureau surveyed households on their 2019 incomes in 2020, during some of the worst months of the pandemic. More of the people it was able to reach were higher income, and as a result, its data shows that median real income surged 7.2% in 2019. The following year, when the data was more accurately measured, it fell 2%.
Cutting through the noise, real median income was 8.2% higher in 2020 than in 2016.
Meanwhile, under Biden, inflation weighed heavily on household income, especially in 2022. As of last year, real median income was up 1.3% from 2020. Analysts at Motio Research estimate it has risen since then, but even so income growth under Biden will almost certainly be lower than under Trump.
Biden vs. Trump on wealth creation
Americans got significantly wealthier under Trump, and here, there was a big bump after the pandemic hit. At the end of 2019, average real net worth for households in the middle fifth by income was 13.5% higher than it had been in the final quarter of 2016, according to the Federal Reserve. By the end of 2020, that gain had swelled to roughly 30%. Jumps in the stock market and home prices had something to do with that. So did the massive amounts of government relief that poured into household bank accounts.
Stocks and home prices have risen a lot during Biden’s time in office, but inflation makes those gains much less impressive. Many households have also spent down the money they saved from government stimulus passed during Trump’s last year in office, and Biden’s first. As of the second quarter, real net worth for households in the middle fifth by income was up 4.6% from the end of 2020.
Wealth gains for many middle-class Americans during Biden’s presidency have also been uneven, depending on whether they own a home. Homeowners have had what is typically their most valuable asset rise in price. But those rising prices, in combination with high mortgage rates, have put buying out of reach for many who don’t own a home.
