Is the US economy better or worse now than under Trump – Nachrichten AG

In the discussions surrounding the 2024 US presidential election, one topic is particularly prominent: How has the US economy performed under Joe Biden compared to Donald Trump? While Vice President Kamala Harris claims that the US economy is the strongest in the world, former President Trump emphasizes that he created the “greatest economy in the history of our country,” which was destroyed by the Biden-Harris administration. But what are the real facts?

Economic growth: A comparison

Gross domestic product (GDP) is an important indicator of economic growth. Under Trump's presidency, GDP initially experienced a dramatic drop due to the COVID-19 pandemic, followed by a rapid recovery that was better than in many other Western countries. When Trump left office in January 2021, the average annual growth rate was 2.3%. Under Biden, that figure has so far been 2.2%.

However, Trump's claim that the US economy under his leadership was the largest in the country's history is not entirely true. There were periods, such as in the 1970s, when GDP growth was much higher than the average under both presidents.

Inflation and prices

A big topic in the current debate is inflation. Under Biden, prices rose sharply in the first two years of his administration, reaching a peak of 9.1% in June 2022. Trump called this the “worst inflation we've ever had,” but that's not entirely true. In the 1980s, inflation was well above 9%.

Inflation has now fallen to around 3%, but remains higher than when Trump left office. Food prices in particular rose sharply at times under Biden, for example by 13.5% in August 2022. Experts attributed global supply chain problems caused by COVID-19 and the Ukraine war to inflation, but Biden's multi-billion dollar “American Rescue Plan” also played a role, although it also boosted demand for goods.

Employment and labour market development

Another key point is the development of the labor market. Before the pandemic, Trump recorded almost 6.7 million new jobs in the first three years of his term. Under Biden, around 16 million new jobs have been created so far – a record since records began in 1939. However, Biden benefited greatly from the economic recovery following the pandemic-related lockdowns.

The unemployment rate is also showing interesting developments. Under Trump, it fell to 3.5% before the pandemic, then rose sharply due to the pandemic, ending at around 7% when he left office. Biden's administration was able to reduce the rate further, reaching the lowest level in over 50 years at 3.4% in January 2023, before rising again to 4.3%.

Wages and financial markets

As for wages, they have increased under both Trump and Biden, but even under Biden they have not increased enough to offset inflation. The real value of average wages is lower today than it was at the beginning of Biden's term.

The financial markets, especially the Dow Jones Index, have experienced ups and downs under both presidents. While the index reached record highs under Trump and plummeted due to the pandemic, it was able to recover by the end of Trump's term. The index continued to grow under Biden and new record highs were reached, despite recent turbulence.