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For much of Biden’s presidency, consumer sentiment was as bad as it was during the worst days of the Great Recession following the 2008 financial crisis, according to the University of Michigan Surveys of Consumers. Over the course of his tenure, the sentiment index has averaged just under 81%. By comparison, it averaged nearly 93% under former Presidentor Biden’s record: Prices have risen 20% since he came into office. The spike in inflation on his watch will define his economic legacy.
One possible way to correct for the distortion is to exclude the pandemic years — both 2020, which saw the initial crash, and 2021, which was boosted by the reopening. From 2017 through 2019, GDP growth averaged a 2.82% annual rate. From the end of 2021 through the second quarter of 2024, the equivalent rate was 2.26%. So, Trump partisans could argue that his record would be favorable to Biden’s without the pandemic. At first glance, Biden blows away Trump in terms of job creation.
Before COVID-19, the employment rate rose throughout Trump’s term, which is probably a major factor in voters’ positive memories of that time. The employment-to-population ratio hit 61.1% in February 2020, on the eve of the pandemic, the highest such rate since the 2008 financial crisis. Under Biden, the ratio has come close but never regained that level, maxing out at 60.4% in November of last year.
“Even in situations where we have strong economic indicators like a low unemployment rate or rising wages, inflation kind of cancels that out, and that leaves consumers to be pessimistic about their financial situation,” said Chip Lupo, an expert for WalletHub. Comparing income growth under Trump and Biden is especially difficult because of pandemic distortions and the subsequent high inflation.
Even though inflation has been high during the Biden years , earnings growth has outpaced inflation. Real median hourly earningsIt could easily be argued, though, that real earnings growth has been slower than it should have been, or worse than under Trump. Republicans on the Joint Economic Committee, for instance,that if earnings grew at the same pace that they did during the pre-pandemic Trump years, they would be nearly 3% higher today.
Ryan Sweet, the chief U.S. economist for Oxford Economics, said real disposable income was a key indication of financial health, as it demonstrates households’ ability to spend — which in turn drives much of the overall business cycle. It also provides a sense of the resources that families have to keep up with debts, such as mortgages and car payments. “When you’re thinking about firepower for consumer spending, that’s the key thing,” he said.
“In the end, I subscribe to the idea of Occam’s razor in explaining why voters are downbeat, why perceptions of the economy are more pessimistic now than in the Trump administration or prior years — is inflation and interest rates,” Sweet said. To use another data source: The weekly grocery bill for a non-thrifty family of four, two parents with two young children, measured by the U.S. Department of Agriculture rose 5.8% under Trump, from $250.40 to $264.90. The price of a gallon of regular gas averaged $2.41 during Trump’s time in office, according to Energy Information Administration data. Overall energy prices, a category that includes fuels and electricity, are up nearly 30% under Biden. They rose just 2.3% under Trump.
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