Introduction
As Americans prepare to cast their votes, economic performance is front and center, with Vice President Kamala Harris highlighting the Biden administration's accomplishments in job creation, while former President Donald Trump emphasizes the struggle with inflation. Both narratives capture elements of truth—but the complete economic story lies between these opposing claims. With each administration navigating distinct challenges, from the unprecedented COVID-19 pandemic to global supply chain disruptions and the Russia-Ukraine war, their impacts on jobs and inflation reflect their unique contexts.
As Election Day nears, Americans are looking closely at economic performance under both the Biden/Harris and Trump administrations. From jobs to inflation, stock market returns, and GDP growth, each administration’s economic narrative reflects their unique challenges and achievements.
As Americans navigate through high-stakes election cycles, understanding the economic impacts of both the Biden/Harris and Trump administrations becomes crucial. While job creation, stock market gains, and GDP growth are often in the headlines, other aspects like consumer sentiment, gas prices, and federal debt are equally important indicators of economic health. Each of these areas has seen significant shifts in recent years, shaping everyday life for millions of Americans.
Overview
• Comparison of Biden vs. Trump on jobs and inflation.
• Insights into stock market, GDP, and debt under each.
• How COVID-19 affected job gains under both.
• The impact of global factors on gas prices and inflation.
• Limited presidential power vs. Federal Reserve’s role.
Inflation: Two Different Realities
Inflation has been one of the most significant economic factors affecting Americans' daily lives, from grocery bills to housing and fuel. Under the Biden administration, inflation has surged 20.1% over the first 45 months, with an annualized inflation rate of 5.4%. This marks a stark contrast to Trump's tenure, which saw inflation increase by just 7.1% over the same period at an annualized rate of 1.9%.
The highest inflation under Biden, reaching 9% in mid-2022, was the worst the U.S. had experienced in 40 years. Although inflation has since moderated to just over 3%, its initial spike was a result of several complex factors: supply chain issues lingering from the COVID-19 pandemic, increased consumer demand after the economy reopened, and energy price hikes due to the Russia-Ukraine conflict. Global economies also saw similar inflation surges, underscoring the international nature of this phenomenon.
Comparatively, the Trump era benefited from a relatively stable inflationary environment, allowing for low consumer price growth. The 1.9% inflation rate during his administration can largely be attributed to low energy prices, a stable labor market, and steady growth without major global crises. However, the Trump administration’s response to COVID-19—particularly the rapid stimulus packages and interest rate cuts—laid the groundwork for inflationary pressures that surfaced during Biden's term.
The Job Market: Record Growth and New Challenges
When it comes to job creation and employment, both administrations claim strong records, though the dynamics were different. Since Biden took office, overall employment has increased by 12%, with unemployment dropping from 6.7% to 4.1%. In addition, average wages have risen by 19%, which has helped many Americans offset higher living costs. The Biden administration’s job market achievements are particularly notable, as they occurred alongside the Federal Reserve’s aggressive interest rate hikes aimed at curbing inflation—actions that typically weaken employment growth. Despite these pressures, the U.S. has seen robust job growth, though recent data shows signs of cooling in certain sectors, suggesting that economic growth might be stabilizing.
Trump’s job record is also impressive, especially in pre-pandemic years. During his tenure, unemployment fell from 4.7% to 3.5% in late 2019 and early 2020, hitting a low not seen since 1969. Wages rose by 15%, outpacing inflation and increasing Americans’ purchasing power. The Trump administration’s focus on deregulation and tax cuts was credited with spurring this job market strength. However, COVID-19 triggered massive job losses in 2020, with the unemployment rate briefly soaring to 14.8%, the highest in U.S. history. The recovery started under Trump’s stimulus efforts but required continued intervention well into Biden's term.
Wage Growth and Real Purchasing Power
While wage growth was a feature of both administrations, rising prices have affected the real purchasing power of American workers differently under each. During Trump’s term, wage gains consistently outpaced inflation, with a 15% increase in real wages. Americans felt this wage growth in their day-to-day lives, with housing, transportation, and essentials remaining relatively affordable.
Biden’s term, however, has been marked by wage gains that often struggled to keep up with inflation. Although average pay increased by 19%, much of this has been offset by higher prices for essential goods and services. The impact of inflation on purchasing power has been a significant issue, particularly for lower- and middle-income households. However, as inflation has eased, recent months have shown real wage gains beginning to surpass inflation, providing some relief to American consumers.
Economic Growth and Interest Rates: A Balancing Act
Economic growth, driven by both domestic and global factors, has shown resilience under Biden, with U.S. GDP expanding despite significant interest rate hikes from the Federal Reserve. These hikes—among the most aggressive in decades—aimed to curb inflation but typically slow down economic activity. Yet, growth has remained positive, reflecting a robust recovery from the pandemic’s effects. Recent signs suggest this growth may stabilize, with projections for a moderate slowdown in 2024 as the economy adjusts to the higher interest rate environment.
During Trump’s administration, economic growth was solid, averaging around 2.5% annually before the pandemic. The combination of tax cuts and deregulation created an environment conducive to corporate investment and expansion. However, the pandemic recession wiped out these gains temporarily, leading to a 3.4% contraction in 2020—the largest annual drop since 1946.
Current Trends and Implications for the Future
As Election Day approaches, the U.S. economy faces mixed signals. Inflation has slowed but remains a key concern for voters, while job growth is robust yet showing signs of cooling. The housing market is also in flux, with high interest rates reducing affordability for many prospective buyers. Additionally, supply chain challenges and global economic uncertainties—such as oil prices influenced by the Middle East and tensions in Ukraine—continue to affect the economic outlook.
Voters will ultimately have to weigh the trade-offs of each administration: Trump’s low inflation and early job gains versus Biden’s impressive job market recovery and ongoing inflation challenges.
The COVID Jobs Asterisk: Dissecting the Recovery
One key point that sets Biden and Trump’s labor market performances apart is the timing and nature of job recovery post-COVID. Much of the job growth Biden touts comes as part of a post-pandemic economic bounce-back, not necessarily brand-new economic growth. In February 2020, just before the pandemic took hold, unemployment was a historically low 3.5%. After spiking to an unprecedented 14.9% in April 2020, Biden’s efforts have brought the rate down to 4.1% as of the latest data. However, compared to pre-pandemic levels, the number of employed Americans has only grown by 4%, showing that a significant portion of the Biden administration’s job gains are part of a natural rebound from the COVID-19 crisis, not entirely from new economic expansion.
On the other hand, Trump’s record depends heavily on where you draw the line. Pre-COVID, Trump oversaw a robust labor market, with record-low unemployment levels at 3.5%. However, when COVID-19 struck, millions of jobs were lost, shrinking the workforce size. By the end of Trump’s term in December 2020, the workforce was actually smaller than when he took office. Biden’s administration capitalized on this initial groundwork but also faced the challenge of sustaining job growth amid rising inflation and global economic uncertainty.
Stock Market Performance: Trump’s Boom vs. Biden’s Stability
For investors, the stock market is often a quick measure of economic success, and here too, both administrations have impressive, albeit different, stories to tell. Under Trump, the stock market experienced rapid growth, with the S&P 500 yielding an annualized return of 16.3% during his presidency. Trump’s focus on corporate tax cuts, deregulation, and a pro-business environment attracted investors, leading to a bullish stock market.
Biden’s tenure has seen the S&P 500 deliver an annualized return of 12.6%—strong but more measured compared to Trump’s era. Despite fears of a stock market crash under Biden, his administration has provided stability, and the U.S. stock market has demonstrated resilience amid inflation concerns and global unrest. Factors like record-high corporate earnings, especially in sectors like technology and healthcare, have contributed to this stability, even though growth rates have tempered slightly compared to Trump’s administration.
Interestingly, both administrations managed to deliver above-average stock market gains despite significant headwinds: Trump with COVID-19 and Biden with inflation and international conflicts. While Trump’s economic policies gave the stock market a substantial boost, Biden’s emphasis on long-term investments in green energy, infrastructure, and manufacturing are viewed as setting up a new base for future growth, especially as the economy shifts towards sustainable and tech-driven sectors.
GDP Growth: Sustaining Economic Output Amidst Challenges
Gross Domestic Product (GDP) growth offers another dimension for comparing these administrations, especially in understanding the broader impact of their economic policies on the nation's economic output. During Trump’s first three years, real GDP grew at an annualized rate of 2.7%, benefiting from a combination of tax cuts, regulatory policies, and a strong consumer base. However, 2020 saw a severe contraction due to COVID-19, resulting in an average annualized GDP growth rate of just 1.4% across his term. While this figure doesn’t paint the full picture—since it includes the COVID-19 downturn—it reflects the pandemic’s deep impact on his economic legacy.
Biden’s administration began during the early recovery phase, which saw a GDP growth spike in 2021 at 5.9%. This high growth rate was largely fueled by a combination of pent-up consumer demand, stimulus measures, and the re-opening of businesses nationwide. However, this rapid growth was challenging to sustain, especially as inflation took hold. By 2022, GDP growth slowed to 1.9%, and the economy has continued a more balanced pace into 2023 and 2024, recording growth rates of 2.5%, 1.6%, and 3% in recent quarters. Biden’s administration highlights its 3.5% average growth rate as a success story of sustainable recovery post-COVID, though recent trends point to stabilization.
One notable factor in Biden’s GDP performance is his administration’s focus on stimulating long-term economic resilience rather than rapid short-term growth. Investments in infrastructure, green energy, and manufacturing have helped diversify economic output. As these projects progress, they are expected to contribute to GDP growth in the coming years, potentially shaping a future-focused U.S. economy.
Economic Outlook: Weighing the Options
As we look to the future, each administration’s economic approach has distinct advantages and challenges. Trump’s pro-business, low-tax strategy drove an initial stock market boom and pre-COVID job growth, while Biden’s focus on sustainable growth and inflation control has delivered consistent employment gains and stable market performance in a challenging global environment.
For young voters, the economic legacies of Trump and Biden offer lessons on resilience, recovery, and sustainability. Both administrations have shown that while high inflation and pandemics can disrupt progress, effective policies can still deliver gains across jobs, markets, and GDP. With inflation easing and job markets steady, 2024 will be a crucial year for voters to decide which economic path best fits their vision for America’s future.
Consumer Health: Sentiment and Savings Under Pressure
Consumer sentiment—a key measure of how Americans feel about the economy—has seen ups and downs over the last few years. According to the University of Michigan’s Consumer Sentiment Index, last month’s sentiment was lower than it ever was under Trump, reflecting the unease many Americans feel despite strong job growth and a high-performing stock market. The reasons behind this lie mainly in inflation and the rising cost of living, which have affected household budgets nationwide.
Even with high employment levels, the struggle with rising prices has hit consumer confidence. As inflation surged over recent years, the prices of essentials like groceries, utilities, and housing have climbed, squeezing disposable income. The personal savings rate, which stood at 7% in September 2019, has dropped to 4.6% in the latest figures. By comparison, under Trump, the savings rate never fell below 5%, highlighting that consumers had more leftover income for savings and investments than they do now.
Young adults and families are feeling this squeeze especially hard, as lower savings rates impact future financial security, limiting the funds available for emergencies, home ownership, and even education. Despite record-high stock market returns, there is an underlying sentiment that everyday Americans are struggling to keep up. While Biden’s policies have helped job growth, rising prices have overshadowed these gains for many, keeping sentiment subdued.
Gas Prices: Volatility in the Energy Market
Few factors impact consumer sentiment like gas prices, which affect transportation costs, goods delivery, and the overall cost of living. Under Trump, the average cost of a gallon of gasoline fell slightly, from $2.37 to $2.28 from December 2016 to the end of his term. But as the Biden administration took office, global energy markets saw major disruptions that led to price hikes. The average price per gallon rose to $3.10 in early 2021 and spiked further in 2022, reaching over $5 following Russia’s invasion of Ukraine.
This surge had wide-ranging effects, impacting not just daily commuters but also industries like trucking, logistics, and manufacturing, which rely on affordable energy to operate. Global oil markets reacted sharply to geopolitical events, particularly as the U.S. and its allies sanctioned Russian oil, one of the world’s biggest sources. In response, the Biden administration took steps to stabilize prices, including releasing oil from the Strategic Petroleum Reserve, which temporarily brought prices down. However, high energy prices continue to impact the cost of goods and services in 2024.
For young voters and climate-conscious Americans, the rising costs and dependence on oil highlight the need for a shift towards cleaner, more sustainable energy sources. The Biden administration has championed green energy investments, proposing policies to reduce fossil fuel reliance. But these efforts take time to impact markets, leaving consumers still facing high prices at the pump today. Trump’s administration favored energy independence, expanding domestic oil and gas production, which kept prices stable in the short term but faced criticism for environmental impacts. The energy debate remains central to economic policy and a significant factor for voters.
Federal Debt: The Growing National Debt Crisis
Under both Trump and Biden, the national debt has soared, reflecting an increase in government spending. The U.S. national debt currently sits at a record $35.8 trillion, up by 29% since Biden took office. Comparatively, the debt rose by 39% during Trump’s presidency, jumping from $19.95 trillion in January 2017 to over $27 trillion by January 2021. This rapid growth is a result of unprecedented government spending, driven by efforts to support the economy through COVID-19 relief, infrastructure projects, and social programs.
While Trump’s administration focused on tax cuts and deregulatory measures that encouraged private investment, it also led to record deficits, particularly in 2020 when COVID-19 relief packages pushed the deficit to $3.13 trillion. Biden’s administration, meanwhile, has continued to increase spending, aiming to fund infrastructure and green energy initiatives. The federal deficit for the fiscal years 2021 to 2023 stands at $5.85 trillion, surpassing Trump’s deficit in his first three years.
For young Americans and future generations, the national debt poses significant concerns. High debt levels lead to increased interest payments, which future taxpayers will need to cover. This debt burden limits the government’s ability to invest in crucial areas like education, healthcare, and technology. Additionally, rising debt often leads to inflationary pressures, which is especially concerning in an environment where inflation is already elevated. As Biden seeks re-election, his administration will likely emphasize long-term investments that aim to reduce debt by fostering economic growth, while Trump and his allies argue for fiscal responsibility through spending cuts.
A Generation’s Economic Future at Stake
The economic choices made by these two administrations reflect broader debates about the best ways to ensure prosperity. Trump’s economic approach focused on short-term gains, favoring business-friendly policies, tax cuts, and energy independence. His administration’s emphasis on deregulation and economic stimulus resulted in a booming stock market and strong consumer confidence pre-COVID. In contrast, Biden’s approach has been more cautious, focusing on sustainable, long-term economic health through investments in green energy, infrastructure, and higher wages.
Both approaches have strengths and trade-offs, and for young Americans, these debates will shape the future of their economic opportunities.
Under Biden/Harris And Trump—From Jobs to Inflation
With the economy on every voter’s mind as the November election looms, the October jobs report has cast new light on the state of U.S. job growth—and the results are hardly comforting. According to the latest data, only 12,000 jobs were added in October, making it the weakest month for job creation since December 2020. This unexpected slump adds fuel to recession fears, and many wonder if the country’s post-pandemic recovery is hitting a critical turning point.
This slowdown has broader implications, especially for young adults gearing up to enter the workforce and families trying to keep up with rising costs. In an attempt to ward off an economic slowdown, the Federal Reserve lowered interest rates in September—the first rate cut in nearly four years. The hope is that by reducing borrowing costs, the Fed will boost both consumer and corporate spending. But will it be enough to reinvigorate job growth and keep the economy on track?
For Vice President Harris, the strategy includes doubling down on key areas where Americans need support most. Her economic plans focus on expanding child tax credits, aimed at easing the financial burden for working families, and implementing policies that target the skyrocketing costs of essentials like groceries. These moves are intended to alleviate inflationary pressures directly impacting everyday Americans, especially as the cost of living remains high.
On the other hand, former President Trump is promoting an economic plan that contrasts sharply with Harris’s, appealing to those who want a return to his administration’s policies. Trump’s strategy includes imposing steep tariffs on Chinese goods, a move intended to protect American jobs and industries but which economists warn could exacerbate inflation by raising the prices of goods imported from overseas. He has also pledged to rein in government spending, which could reduce the federal debt but may also mean cuts to social programs and services that many families rely on.
Key Background: The Economic Stakes of the Election
The economy has emerged as the top issue for voters as they weigh their options in the upcoming election, with polls indicating that a significant portion of Americans trust Trump more than Harris to manage the nation’s finances. According to surveys, a larger percentage of voters believe they would be better off financially under a second Trump term than under Harris. This sentiment persists despite the Biden administration’s efforts to highlight its economic successes, including record stock market highs, GDP growth, and the popular CHIPS Act, which has fueled America’s tech manufacturing boom.
One of the main challenges Harris faces is convincing voters that her policies will translate into a better quality of life for all Americans, not just through big headline figures like stock market gains. Her approach aims to address economic inequality, promising relief for low- and middle-income families. The child tax credit expansion, for example, has the potential to lift millions of children out of poverty, a goal that resonates with younger voters who are focused on fairness and social equity. Additionally, by targeting grocery prices, Harris is tackling an area of inflation that directly impacts Americans’ day-to-day lives.
Trump’s proposed tariffs, however, signal a return to his economic nationalism, with the goal of boosting U.S. manufacturing and reducing dependence on China. While some voters view this as a necessary step to protect American industries, others fear that it could raise prices for consumers and hurt businesses that rely on international trade. Trump’s focus on reducing government spending is also a double-edged sword; while it may appeal to fiscal conservatives, it could come at the cost of cuts to public services, which are often relied upon by working-class families.
Economic Achievements and Public Perception
Both administrations have their share of economic achievements and challenges. Under Biden, stock market gains have hit record highs, with the S&P 500 posting an annualized return of 12.6% since 2021. GDP growth has also remained robust, with recent quarterly growth rates showing a steady increase. The CHIPS Act, a signature policy under Biden, was instrumental in positioning the U.S. as a leader in semiconductor manufacturing—just in time for the AI boom, which has only heightened the demand for these critical components. These achievements underscore Biden and Harris’s commitment to long-term investments in American innovation and infrastructure.
Yet, for many voters, these achievements don’t translate into tangible improvements in their personal finances. Inflation has taken a toll on household budgets, and the recent slowdown in job growth raises questions about the sustainability of the current economic recovery. The October jobs report, with its disappointing figures, has only intensified these concerns, reminding Americans of the precariousness of the post-pandemic economy.
In contrast, Trump’s time in office saw robust job growth and record-low unemployment before the pandemic struck. His administration’s tax cuts and deregulatory policies were credited with driving economic expansion, particularly in sectors like manufacturing and energy. However, his tenure also saw a significant increase in the national debt and record-breaking deficits, particularly in the wake of COVID-19 relief spending. For Trump’s supporters, his record on job creation and stock market performance serves as proof that his economic policies worked.
The Battle for Economic Trust: Young Voters in Focus
For young voters, the economic stakes of this election are deeply personal. Many are entering the workforce during a period of economic uncertainty, and the direction of the next administration will shape job prospects, wages, and access to resources like affordable housing and education. Harris’s focus on social safety nets, from child tax credits to targeted price controls, appeals to younger voters who prioritize economic justice and equity. Her policies aim to create a more inclusive economy, where the benefits of growth reach everyone, not just those at the top.
On the other hand, Trump’s promises to reinvigorate American industries and protect jobs through tariffs resonate with voters who want to see the U.S. regain its manufacturing edge. His plan is aimed at creating job opportunities within the country, though at the risk of higher consumer prices. For young people, especially those interested in job stability and financial independence, these are crucial considerations.
The October jobs report has set the stage for an election defined by competing economic visions. Both Harris and Trump offer contrasting approaches, each with the potential to reshape the economy in significant ways. For young Americans, understanding these policies isn’t just about choosing a candidate; it’s about choosing the future they want to live in. Will they vote for policies that promise stability, social equity, and relief from inflationary pressures, or will they choose a path that emphasizes economic nationalism, fiscal restraint, and job creation?
As voters prepare to make their voices heard, the choice before them is more than just a preference for one leader over another—it’s a decision about the economic direction of the nation, and the impacts that will echo for generations to come.
Contra:
In the whirlwind of political debates, it’s easy for economic facts to get tangled up in misinformation. Former President Trump and his allies have painted a very specific picture of the Biden administration’s economic impact, particularly around job growth and inflation. They argue that Biden-era job gains are “virtually 100%” due to illegal immigration—a claim that doesn’t align with the data. While there has been an increase in the foreign-born American workforce—by around 22% under Biden—the American-born workforce has also grown by about 5%. Not only is this data clear, but much of the foreign-born workforce includes immigrants who entered the U.S. legally, contributing significantly to the economy and filling essential roles across industries.
Misinformation has also seeped into inflation discussions, with Trump suggesting that inflation has soared by nearly 50% under Biden—another claim that falls far from reality. The Consumer Price Index (CPI), which tracks inflation, does show elevated rates over the past few years, but it’s nowhere near 50%. Similarly, Biden has inaccurately cited inflation at 9.1% when he took office in January 2021; in truth, annual CPI inflation was around 1.4% at that time. These exaggerated claims on both sides make it hard for voters to separate fact from fiction and understand the real causes behind price increases and job changes.
So, why is inflation such a hot topic in every election cycle? In a nutshell, inflation affects almost everyone, from young adults just starting to budget to families balancing mortgages and grocery bills. When prices rise, everyone feels the pinch. However, it’s essential to understand that inflation doesn’t just occur because of a single administration’s policies. In fact, much of the inflation experienced post-pandemic has been part of a larger global trend that hit nearly every developed economy. With the pandemic came supply chain disruptions, labor shortages, and skyrocketing demand as economies reopened—all factors that contributed to higher prices.
How Much Control Do Presidents Actually Have Over the Economy?
It’s a common belief that if the economy is booming, the president deserves all the credit; if it’s tanking, the president deserves all the blame. But the truth is far more complex. Despite popular opinion, the power that presidents wield over the economy is often limited. Much of what we’ve seen economically over the last few years—like the recession during the pandemic and the resulting inflation afterward—was a worldwide phenomenon, not something unique to the U.S. And while both Trump and Biden have made claims about keeping gas prices low, the reality is that these fluctuations are more influenced by global supply and demand than any particular policy.
Take gas prices, for example. Both presidents have claimed success for keeping prices low, but the average price of gas is influenced by factors far beyond the Oval Office. OPEC production cuts, global energy demands, and even seasonal changes play significant roles. In 2022, following Russia’s invasion of Ukraine, global oil supplies were disrupted, causing a price surge. Although Biden, along with U.S. allies, moved to curb dependence on Russian oil, these efforts alone didn’t prevent prices from spiking. Simply put, while presidents can shape certain aspects of energy policy, they don’t have a magic wand over global markets.
But if presidents don’t directly control economic growth and inflation, who does? The answer lies largely in the hands of the Federal Reserve (or "the Fed"). This independent government entity sets interest rates, and those rates have a huge impact on the economy. When inflation began to rise, the Fed stepped in by raising rates to slow down spending and bring prices back to stable levels. These interest rate hikes make borrowing more expensive, which can cool down spending on things like housing and large purchases. Fed policy is not always popular, but its decisions often have a more immediate effect on inflation than presidential policy can.
Key Takeaway for Young Voters
For young voters, understanding the true role of government in shaping the economy is key to making informed decisions at the ballot box. Yes, presidential policies can steer economic direction, but so much of the economy’s ups and downs are influenced by forces beyond the White House. The Federal Reserve’s influence over interest rates and, by extension, inflation, has proven to be a critical factor in economic stability. And the global nature of today’s economy means that what happens in another part of the world—like an oil supply disruption or a trade policy change—can ripple back to impact prices and wages here in the U.S.
This complex economic web means that, while Biden and Trump both have differing visions for the U.S. economy, the impact of these policies may be less straightforward than campaign promises suggest. For young people just entering the workforce or starting to build their financial lives, understanding these dynamics is essential. As voters, being aware of the real factors influencing jobs, prices, and wages can help cut through the noise of exaggerated claims and better navigate the impact of these policies on daily life.
Conclusion
In a world where global markets, the Federal Reserve, and complex supply chains heavily influence economic outcomes, it's clear that the president's power over the economy has limits. While both Biden and Trump have shaped policies with significant impacts, many of the most critical shifts—like inflation and gas prices—depend on broader forces beyond any administration’s control. As young voters approach future elections, understanding these underlying economic realities can empower them to make informed choices, cutting through the political noise to grasp what truly affects their jobs, expenses, and financial well-being. In the end, a balanced perspective on economic policies is crucial for all Americans striving to build a more secure future.
