As Harris and Trump campaign on economics, Joel Naroff looks at how the economy fared under Trump and Biden

If you get your economics from a politician or political ads, you get the economy you deserve. Data provide a clearer, less biased view of each candidate’s economic implications.

Every four years I compare the presidential candidates’ economic proposals. But given that former President Donald Trump and Vice President Kamala Harris both have served in office, it makes sense to evaluate how their economies actually performed.

Was Donald Trump accurate in saying that “I created one of the greatest economies in the history of our country”? And was Kamala Harris correct in commenting that “Bidenomics is working” in reference to her and President Joe Biden’s policies?

The data shows us the Trump economy was far from the best in history. Considering GDP, employment, and production, it was mediocre to poor. Indeed, the economy expanded much more strongly under Biden and Harris.

But when it comes to voters’ perceptions of whether Bidenomics is working, it’s not the economy, it’s inflation on which they are focusing.

Before any analysis can be performed, a decision has to made on how to handle COVID-19.

While COVID and the shutdown of nonessential businesses started during Trump’s term, it was still going full-tilt when Biden took over. Biden also had to cope with the resulting tangled global supply chain, labor and transportation shortages, bird flu, wars in Ukraine and the Middle East, and a Fed that was tardy in cutting interest rates.

Adjusting Trump’s economic numbers for COVID might be doable, but not his inflation numbers. Correcting Biden’s economic and inflation numbers for the crises he faced would be impossible.

Historians judge presidents on their entire term and how they deal with the crises they faced. The best way to evaluate presidents is by their entire time in office.

Looking at each presidency in its entirety, the overall economy expanded faster under Biden than Trump.

The most encompassing measure of economic activity is GDP. The Trump economy expanded by a 1.9% annual average growth rate over his four years. Under Biden, through the second quarter of 2024, the average rate was 2.9%, one full percentage point faster.

To put these numbers in perspective, the average GDP growth rate for the last eight presidents from Carter through Biden was 2.7%. Trump’s performance tied with George W. Bush for the slowest growth rate of that group. Biden came in fourth.

There are several measures that talk to the state of the labor market: The number of employees, the number of individuals working, and the unemployment rate. How did Trump and Biden do?

The economy lost jobs under Trump, but employment surged under Biden.

At the end of the Trump administration, there were 2.7 million fewer workers on business payrolls than when he took office. From Biden’s inauguration through September 2024, businesses created 16.2 million new positions.

Of the last eight presidents, Trump is the only one who saw total payrolls decrease from when he took office. Biden, Jimmy Carter, Ronald Reagan, Bill Clinton, and Barack Obama all created double-digit millions of new jobs. Biden’s average monthly increase was the largest of all.

Similarly, when Trump left office, there were 2.3 million fewer people working compared to the month he took office. This September, there were 12 million more individuals working than when Biden took office.

No other president in the past 50 years posted employment declines during their tenure.

Finally, let’s look at unemployment. The unemployment rate increased during the Trump administration — from 4.7% at the end of the Obama administration to 6.4% in January 2021.

Of the eight recent presidents, only in the two Bush presidencies was the unemployment rate higher at the end than the beginning.

Furthermore, in April 2020, the rate reached a post-WWII high of 14.8%, amid COVID-related shutdowns, but it fell sharply subsequently.

Under Biden, the unemployment rate in September was 2.3 percentage points lower than when he took over. It should be noted that the rate bottomed at 3.4% in early 2023 and while still historically low, it has slowly increased over the past eighteen months.

Manufacturing employment is a hot-button issue in this campaign, and former President Trump has claimed he was great for the manufacturing sector.

During Trump’s four years, the manufacturing sector lost 178,000 jobs.

So far under Biden, the manufacturing workforce has expanded by 729,000 employees, the second-most by any president in the last 50 years.

A second manufacturing measure is industrial production.

Under Trump, manufacturing output decreased by about 1.2%. So far under Biden, it has increased by roughly 2.5%.

Of the eight most recent presidents, the only other who saw manufacturing output shrink during his administration was George W. Bush (-5.2%).

One other hot-button issue being raised is oil production. Trump grew oil output faster than Biden, 26% to 18%. But, under Biden, U.S. oil production is at the highest level in history.

It is not just jobs or unemployment rates that people worry about. Income matters to them as well and so do costs of goods and services.

Hourly earnings grew by a very solid 3.8% under Trump, but that gain paled in comparison to the 4.9% rise posted under the Biden administration.

Weekly earnings growth was similar under both presidents: 4.2% for Trump and 4.3% for Biden.

Given the data, it is hard to understand why people think the Trump economy was great or even better than the Biden economy. To understand why that belief persists, we have to consider the biggest economic issue in this campaign: inflation.

While the Biden income numbers should have made people happy, people worry about their ability to buy things with that money. That means inflation-adjusted income and wages are crucial.

In June 2022, year-over-year inflation hit a peak of 9%. This was the highest rate in 40 years. Even excluding volatile food and energy, the rate peaked at 6.6% in June 2022. So far, during the Biden years, inflation has averaged 5.5% overall and 5.1% when excluding food and energy.

During the Trump years, inflation stayed below 3%, bottoming at 0.2% during the worst period of COVID. Excluding food and energy, inflation never exceeded 2.4% and averaged a very respectable 2% over the four years.

When looking at three key aspects of consumer spending — food, gasoline, and shelter — you see inflation’s impact.

Under Biden, the cost of food rose by 18.7%, gasoline 16.6%, and shelter 15.6%.

Under Trump food was up 7.7%, gasoline 6.7%, and shelter 6.9%.

About the only positive thing you can say about inflation under Biden is that the rate is currently much slower, down from the June 2022 peak to 2.5% now.

Adjusting for inflation, hourly wages fell 1.3%. Making things worse, average weekly hours worked fell so weekly wages dropped even more, by 3.3%.

In comparison, even after adjusting for inflation, hourly wages increased 6.8% under Trump and weekly earnings were up 8.4%.

So what do the data tell us?

While Trump’s economy was not the best in history, and economic growth has been stronger since Biden took office, inflation is an important focus for voters. Even after inflation decelerated sharply, prices remain high, but there is little any president can do about that.