(Bloomberg) — Americans give Donald Trump the edge over Joe Biden on the economy in poll after poll.
Most Read from Bloomberg
That’s even as the Biden years have been the best time to find work since the 1960s, and the US has bounced back from the pandemic with stronger growth than international peers such as the EU, UK and Japan and stronger growth overall than under President Trump.
Instead, voters this year are focused on the steep jump in prices from the post-pandemic surge in inflation.
In the April Bloomberg/Morning Consult swing-state poll, respondents said by 51% to 32% they were doing better financially under Trump than Biden. Out of 15 economic issues, the cost of everyday goods was far and away the top concern of registered voters in the poll.
Covid, of course, powerfully shaped outcomes under both administrations. Trump took office in the midst of a well-established economic expansion, then hit a global pandemic. Biden had to deal with the aftermath.Economic data show the kitchen-table realities behind Americans’ judgment on the two presidents’ performance. The headline numbers don’t capture how income gains were distributed. Nor do they forecast the long-term impact of either president’s policies.Biden-Harris campaign spokesman James Singer said the president “is leading a great American comeback out of the mess of failure Donald Trump left behind.” He said under Biden the country outperformed a prediction by Bloomberg Economics — and many other financial market forecasters — that Federal Reserve interest-rate increases would trigger a recession. He called Bloomberg’s selection of indicators “flawed,” pointing instead to 15 million new jobs created since Biden took office. The Trump campaign argued job losses during the pandemic should be discounted. Spokeswoman Karoline Leavitt said Trump, if re-elected, would “reimplement his America First, pro-growth, pro-job agenda and uplift all Americans.” Voters’ experience of the economy begins with their spending power.
Real disposable personal income per capita — money available to spend after taxes and adjusted for inflation — is a clear measure of standard of living. Under Biden, it’s improved, but on average only at about a quarter the pace set during the Trump years.
Trump fueled the economy with much more deficit-financed stimulus than Biden, enacting a $1.9 trillion, 10-year tax cut skewed toward wealthier households even before the pandemic economic crisis.
The former president pumped in another $3.5 trillion for stimulus checks and other pandemic relief, the nonpartisan Committee for a Responsible Federal Budget estimates. That pushed up Americans’ incomes even though pandemic lockdowns crashed the economy and drove up unemployment.Trump’s tax cuts and pandemic relief compare to $2.2 trillion of net relief under Biden, according to the committee’s estimates. The two presidents’ successive rounds of stimulus sent federal debt soaring.
Still, Biden-era inflation resulted in disposable income growth that’s on track to be one of the worst of any post-World War II presidency.
The cumulative increase in consumer prices during Biden’s term likely will end up being higher than any other president in the past 40 years. By comparison, inflation under Trump generally ran around the Federal Reserve’s 2% target and ended his term even lower.
Trump came into office with inflation at 2.5% in 2017, and the pandemic economic crash brought the rate down to almost zero. Annual inflation hit a 40-year high of 9.1% in June 2022 as the economy re-opened. The rate has since fallen but was still a stubbornly high 3.4% in April.
Republicans blame the pandemic-relief bill Biden signed in March 2021 and other federal spending. But stimulus checks were also distributed during Trump’s presidency, and tax cuts were enacted. The joint effect of pandemic-era relief programs under both presidents likely played a role in generating inflation when the economy reopened.Supply-chain constraints when the country roared back to life were an additional — and significant — catalyst.
Biden’s projected average 4.1% unemployment rate would be the lowest for any modern president except for Lyndon Johnson’s 1965-1969 term.
The jobless rate soared from 3.6% at the end of 2019 to 14.8% in April 2020 as the pandemic raged before falling to 6.4% in the month Trump left office. It continued falling under Biden as the economy recovered.
The Democratic president can boast of a jobless rate below 4% for more than two years, the longest stretch of such low unemployment in more than half a century.
The sustained period of strong employment opportunities has especially benefitted groups that historically had a hard time getting work, such as racial and ethnic minorities and the disabled. African-American unemployment rates hit the lowest level on record under Biden, though they also dropped to a decades-long low under Trump shortly before the pandemic.More mothers who have children under 18 at home now have jobs than ever recorded in data going back to 2009, likely helped by the strong labor market and employers’ post-pandemic acceptance of remote and hybrid work arrangements.
Stocks have surged under both presidents. As of Wednesday’s market close, the cumulative increase in the benchmark S&P 500 stock index under Biden is slightly ahead of gains at the same point in Trump’s presidency.
Stocks finished strong under Trump, with the S&P gaining a cumulative 68% while he was in the White House. That included a roller-coaster pandemic crash followed by a breath-taking rally fueled by government stimulus and Federal Reserve interest-rate cuts.
Trump’s tax cuts slashed the federal corporate income tax rate from 35% to 21%, pumping up company profits and consequently their stock prices. Interest rates were also low and inflation remained under 3% during Trump’s presidency, helping buoy equities.
Under Biden, stocks have been on a tear recently despite higher interest rates. Strong overall economic growth has boosted corporate profits while artificial intelligence advances fed excitement about improving productivity. The market also has benefited from outsized growth of the “Magnificent Seven” US technology companies.
It’s gotten much harder to afford a new home under Biden, largely because the Fed’s campaign of interest-rate increases to fight inflation has driven up mortgage rates.
Even so, average mortgage rates under Biden are lower than for any modern president before Barack Obama.
But the very low mortgage rates during the pandemic have perversely made it harder to buy a new home now. Homeowners who refinanced with cheap mortgages are reluctant to sell, reducing the supply of homes on the market and keeping prices high.
Overall economic growth has been stronger under Biden than Trump, powered by savings consumers had left over from hunkering down during the pandemic along with stimulus from Biden’s pandemic relief package.
The US economy has outpaced global peers under Biden as it recovered from Covid, which produced wild swings in GDP in the final year of Trump’s presidency.
Most Read from Bloomberg Businessweek
©2024 Bloomberg L.P.