The question of whether the US economy has performed better under President Joe Biden or his predecessor Donald Trump is a central theme of the current US presidential campaign. Both parties offer compelling narratives. Vice President Kamala Harris has argued that the US economy under the Biden administration is the “strongest in the world,” while Donald Trump insists that he presided over “the greatest economy in our country’s history” and accuses the Biden-Harris administration of ruining it.
In reality, economic performance under these two presidents is more nuanced. An analysis of key economic indicators such as GDP growth, inflation, employment, wages, and financial markets can provide a clear picture of their respective economic records.
Economic growth
Economic growth, measured by gross domestic product (GDP), is one of the most basic indicators of economic performance. GDP represents the total value of all goods and services produced in a country and is an important measure of economic health.
During Trump’s tenure, economic growth fluctuated significantly due to the impact of the COVID-19 pandemic. The US economy initially experienced stable growth, with an average annual growth rate of around 2.3% from January 2017 to early 2020. However, the onset of the pandemic caused a dramatic drop in GDP as businesses closed and economic activity decreased sharply. After the initial setback, the economy bounced back, showing a strong recovery towards the end of Trump’s term, with annual GDP growth still averaging 2.3% during his four years of presidency.
The Biden administration has continued this trend of recovery, claiming a strong comeback from the pandemic. US GDP growth has averaged 2.2% so far during Biden’s tenure, almost identical to Trump’s average. While Biden’s figure is slightly lower, it reflects a period of ongoing economic stabilisation following the volatile ups and downs of the pandemic years. Importantly, the US has demonstrated the strongest pandemic recovery among G7 countries in terms of GDP growth, a testament to the underlying strength of the economy during this period.
Both presidents faced unique economic challenges. Trump’s term saw a sharp economic downturn due to COVID-19, while Biden’s presidency had to manage a recovery from that downturn. Despite these challenges, overall growth rates under the two administrations are remarkably similar.
Inflation
Inflation, or the rate at which prices rise, has been a hot-button issue in recent years and a major talking point for both administrations. Trump has claimed that the U.S. has experienced the “worst inflation ever” under Biden, but that statement doesn’t hold up against historical data.
Inflation rose sharply in the first two years of Biden’s presidency, peaking at 9.1% in June 2022, driven primarily by global supply chain disruptions caused by the COVID-19 pandemic and the war in Ukraine. The peak in inflation under Biden was significant, but not unprecedented — the U.S. inflation rate was higher in 1981, and there have been other periods in U.S. history when inflation rates have been even higher. Today, inflation has eased to about 3%, which is still higher than when Trump left office, but it reflects a downward trend after reaching its peak. For example, grocery prices rose 13.5% in the year ending in August 2022, the most of Biden’s term, but they have since stabilized, rising only 1.1% from July 2023 to July 2024. Some economists argue that Biden’s $1.9 trillion American Rescue Plan, passed in 2021 to stimulate the economy after the pandemic, contributed to inflationary pressures by injecting large amounts of cash into the economy. While the rescue plan helped accelerate economic recovery and job growth, it may also have contributed to price increases. Inflation has been a global issue, with many Western countries experiencing similarly high rates in 2021 and 2022. The factors behind inflation are complex, involving both global disruptions and domestic policy decisions.
Employment
Employment is another key indicator when assessing economic performance. Both Trump and Biden have strong employment figures to point to, but context is important.
In the first three years of Trump’s presidency, about 6.7 million non-farm jobs were added. However, the pandemic led to massive job losses in 2020, causing unemployment to soar. By the time Trump left office in January 2021, unemployment had fallen from the pandemic peak to about 7% but remained well above pre-pandemic levels.
Under Biden’s leadership, the US labour market has rebounded significantly. According to available data, about 16 million jobs have been added since January 2021, marking the fastest job growth delivered by any president in US history since 1939. This rapid job recovery is partly due to the natural rebound from the pandemic and partly driven by Biden’s US government.
