Donald Trump’s Economic Record: A Reality Check
Introduction
As former President Donald Trump mulls a run for a second term in 2024, he frequently touts his economic record as a major accomplishment. He asserts that the economy thrived during his presidency and has faltered under President Joe Biden. However, a thorough examination of the data reveals a stark contrast to this narrative: the economy has undoubtedly fared better under Biden than it did under Trump.
Economic Growth
The fundamental measure of economic health is its growth. Real GDP, which adjusts for inflation, has surged by an average annual rate of 3.4 percent since Biden took office, dwarfing Trump’s modest 1.8 percent average growth rate. Even excluding 2020, when the pandemic triggered a severe economic downturn, the economy still outpaced Trump’s era, expanding by an average of 2.8 percent per year from 2017 to 2019.
Investment
American businesses have shown a clear preference for Biden’s economic stewardship. Since January 2021, real fixed business investment has soared by an annual rate of 5.4 percent, double the 2.7 percent average rate under Trump. Excluding 2020, real business investment still grew by a solid 5.0 percent per year from 2017 to 2019, but Biden’s 5.4 percent annual rate outshines Trump’s record.
Consumer Spending
Consumers have also reaped the benefits of Biden’s economic policies more than they did under Trump. From 2021 to 2023, real personal expenditures surged by an average of 4.5 percent per year, compared to Trump’s 2.6 percent average from 2017 to 2020. Excluding 2020, real consumer spending grew by a mere 2.0 percent per year from 2017 to 2019, lagging far behind Biden’s 4.5 percent annual rate.
Employment
One of the most striking contrasts between Biden’s and Trump’s economic records lies in employment. Since Biden became president, the number of Americans with jobs has skyrocketed by 14.3 million, while under Trump, there was a net loss of 2.7 million jobs. Even if we disregard the precipitous decline in employment during the early pandemic and the subsequent rebound in 2021, Biden still outperforms Trump. From January 2022 to December 2023, employment grew at an average annual rate of 2.4 percent under Biden, compared to Trump’s 1.5 percent rate from January 2017 to February 2020.
Unemployment
The unemployment rate has also been significantly lower under Biden than it was under Trump. Under Biden, the monthly jobless rate in 2022 and 2023 averaged 3.6 percent, compared to nearly 4.0 percent under Trump from January 2017 to February 2020. Trump often boasts about low Black unemployment, but Biden surpasses him here as well: Under Trump from January 2017 to February 2020, Black unemployment averaged 6.5 percent, compared to 5.8 percent under Biden from January 2022 to December 2023. The same holds true for Hispanics: Their unemployment rate averaged 4.3 percent in 2022 and 2023, compared to 4.5 percent from January 2017 to February 2020.
New Business Creation
New business creation is another vital indicator of economic health. Applications to start new businesses averaged 304,000 per month during Trump’s term, peaking at an average of 365,000 monthly in 2020. From 2021 to 2023, applications for business starts surged to an average of 444,000 per month, nearly 50 percent higher than under Trump.
Inflation
The one area where Biden’s record falls short of Trump’s is on inflation. The GDP deflator, which measures all prices, rose by an average of 2.1 percent per year under Trump, compared to an average rate of 5.4 percent under Biden. However, inflation has been moderating under Biden, and it fell to a 2.1 percent rate in 2023.
The Role of the Pandemic and OPEC
It’s crucial to acknowledge that the COVID-19 pandemic had a profound impact on the economy, affecting both Trump’s and Biden’s presidencies. The plummeting GDP, job losses, and investment decline in 2020 were largely attributable to the pandemic, and the subsequent recovery in 2021 was also influenced by it. Additionally, OPEC’s decision to restrict production in 2021 and 2022 contributed to rising oil prices, which in turn fueled inflation.
Conclusion
Despite the challenges posed by the pandemic and OPEC, the economy has undeniably performed better under Biden than it did under Trump. Biden’s record on economic growth, investment, consumer spending, employment, unemployment, and new business creation all surpass Trump’s. Even on inflation, Biden has made progress in curbing its rise. The facts unequivocally demonstrate that Biden’s economic stewardship outshines Trump’s.