Comparing the U.S. Economy: Then and Now

The state of the U.S. economy is always a major topic of discussion, especially when comparing the policies and performance of different administrations. As of today, the U.S. economy under President Biden is often measured against its status during Donald Trump's presidency. Both leaders faced unique challenges during their time in office, which makes a direct comparison complex. However, looking at key economic indicators such as GDP growth, unemployment, inflation, and the stock market provides a clearer picture.

 The Economy Under Trump

During Donald Trump’s presidency (2017-2021), the U.S. economy experienced a period of significant growth early on. Key points of his economic agenda included tax cuts, deregulation, and a focus on boosting American businesses. Trump's Tax Cuts and Jobs Act in 2017 lowered the corporate tax rate, which led to an initial boost in investment and job creation.

Unemployment

Under Trump, the U.S. saw record-low unemployment rates, with the jobless rate falling to 3.5% by February 2020, the lowest it had been in 50 years. His administration pointed to this as a key success, with strong job growth in sectors like construction, manufacturing, and retail.

Stock Market

The stock market also saw a significant rise, with major indices like the Dow Jones Industrial Average and the S&P 500 reaching new highs, boosted by corporate tax cuts and investor optimism.

 

Tariffs

Trump’s trade war with China, however, created uncertainty in global markets. While some industries benefitted from the tariffs, particularly in steel and aluminum, other sectors, such as agriculture, were hit hard by retaliatory tariffs imposed by China.

COVID-19 Pandemic

 The pandemic dramatically changed the economic landscape in 2020. By the second quarter, GDP shrank by over 30%, and unemployment spiked as businesses shut down. Trump’s administration passed several stimulus packages to address the economic fallout, including direct relief payments and support for small businesses.

The Economy Under Biden

Joe Biden took office in January 2021 amid the ongoing COVID-19 pandemic, inheriting a fragile economy in recovery. His administration focused on stabilizing the economy, expanding the COVID-19 vaccine rollout, and passing further relief packages. 

GDP and Growth

Biden’s administration oversaw significant GDP growth as the economy rebounded from the pandemic. The U.S. economy grew by 5.7% in 2021, the highest annual growth rate since 1984. Much of this was due to the reopening of the economy and the injection of stimulus through the American Rescue Plan.

Unemployment

The job market under Biden improved significantly as pandemic-related restrictions eased. By mid-2023, unemployment hovered around 3.5%, similar to pre-pandemic levels. This recovery was supported by Biden’s infrastructure and social spending bills aimed at creating jobs in sectors like clean energy, construction, and technology.

Inflation

One of the most notable challenges during Biden’s presidency has been inflation. Starting in 2021, inflation rates rose sharply due to a mix of factors, including supply chain disruptions, increased demand, and stimulus spending. By mid-2022, inflation hit a 40-year high, reaching over 9% at its peak. Although inflation has since started to come down, it remains a major concern for American consumers and businesses alike.

Stock Market

The stock market under Biden has experienced volatility. Initially, markets performed well as investors responded positively to the economic recovery and fiscal stimulus. However, fears of rising interest rates and inflation have led to periods of market decline, particularly in technology stocks. 

Energy and Climate Policies

One of Biden’s significant economic goals has been transitioning to clean energy. His administration has focused on climate-related policies, with efforts to promote electric vehicles, renewable energy, and green infrastructure. These initiatives are intended to create jobs while reducing the U.S.’s reliance on fossil fuels, though critics argue that they could raise energy prices in the short term.

Key Differences Between Trump and Biden Economies

Economic Recovery vs. Growth

The Trump economy saw robust growth in the early years, boosted by tax cuts and a favorable business environment, while the Biden economy is largely focused on recovery from the pandemic-induced recession.

Inflation

While inflation was low during Trump’s term, it has become a central issue under Biden. Both administrations faced economic shocks, but Biden’s economy has been more impacted by global supply chain problems and the effects of massive fiscal stimulus.

Job Creation

Both administrations have overseen strong job creation, with unemployment rates now back to historically low levels. However, Biden's job recovery has been largely about bringing people back into the workforce after pandemic lockdowns, while Trump’s job growth came during a more stable period.

Public Spending

Biden has focused more on public investment through large infrastructure and social spending bills, while Trump’s economic approach was more focused on deregulation and tax cuts.

Conclusion

The question of whether the U.S. economy is better now than under Trump depends on the metrics used to evaluate it. Both administrations have faced extraordinary challenges: Trump with the onset of the COVID-19 pandemic, and Biden with its aftermath and the issue of rising inflation. While economic growth and unemployment have recovered under Biden, inflation has been a key concern. The stock market, meanwhile, has seen gains and losses under both presidents, driven by different factors. 

Ultimately, both Trump and Biden have left their unique marks on the U.S. economy, with policies reflecting their different priorities and governing styles. The long-term impact of their economic approaches will likely be debated for years to come.