•Biden beats Trump not just in overall growth: Based on investment rates, American business has preferred Biden’s economy: Since January 2021, real fixed business investment has increased at a 5.4 percent annual rate, twice the 2.7 percent average rate under Trump. And here,
too, Trump lags Biden even with his pandemic pass for 2020: Real business investment increased on average by 5.0 percent per year from 2017 to 2019, compared to Biden’s 5.4 percent annual rate.
•Based on spending, consumers also prefer Biden’s economy. From 2021 to 2023, real personal expenditures increased an average of 4.5 percent per year, versus Trump’s record of 2.6 percent from 2017 to 2020. In this case, a pandemic pass for Trump increases Biden’s advantage: Real consumer spending grew 2.0 percent per year from 2017 to 2019, an annual rate that trails Biden by 55 percent.
•On employment—on top of growth, investment, and consumer spending—Biden puts Trump’s record to shame. The Bureau of Labor Statistics (BLS) reports that since Biden became president, the number of Americans with jobs has increased by 14.3 million—versus a net loss of 2.7 million over Trump’s term, the first decline since Herbert Hoover.
•Under Biden, the monthly jobless rate in 2022 and 2023 averaged 3.6 percent versus nearly 4.0 percent under Trump from January 2017 to February 2020. Trump boasts about low Black unemployment, and Biden beats him here, too: 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. Ditto for Hispanics: Their unemployment rate
averaged 4.3 percent in 2022 and 2023 versus 4.5 percent from January 2017 to February 2020.
•New business creation: applications to start new businesses averaged 304,000 per month over Trump’s term, peaking at an average of
365,000 monthly in 2020. It’s a decent record
but not as good as Biden’s: From 2021 to 2023, applications for business starts averaged 444,000 per month, an average nearly 50 percent higher than under Trump.6
People cite inflation as being the key reason people aren’t buying Biden’s numbers, as voters more acutely feel the increased cost of goods than they do factors like job creation or general economic growth. And despite Biden’s claim that inflation stood at nine percent when he started office (not true, it was 1.4 percent),7 the research suggests high inflation numbers not only can be explained away but are quickly subsiding:
•The best measure is the BEA’s GDP, which shows all prices rising an average of 2.1 percent per year under Trump compared to an average rate of 5.4 percent under Biden—though slowing under Biden to a 2.1 percent rate in 2023.
If Trump deserves a pass for most of 2020 because forces beyond his control drove down GDP, jobs, and investment, new research shows that Biden deserves a similar pass for the runup in prices in 2021 and 2022. That’s because the major forces driving inflation were the pandemic’s impacts on global and national supply chains and OPEC production policies.