Despite an inflation surge and other hangovers of the pandemic, the Biden administration has delivered a US economy with which Americans can have few complaints — and one that contradicts the argument that economic insecurity is primarily driving support for populists like Trump.
Unemployment has been around 4% since late 2021; even hurricanes and a major strike at Boeing failed to shift unemployment above 4.1% in October. The preliminary estimate for the September quarter for GDP growth is 2.8% annual growth, a middling result since the US economy returned to more normal growth rates following the pandemic. But both GDP and jobs data are strong achievements for an economy in which the US Federal Reserve has only just begun reducing interest rates.
Personal consumption expenditure inflation is now down to 2.1%, its lowest since early 2021 and almost back within the Federal Reserve’s target band. Despite the inflation surge, real wages growth returned for US workers in early 2023, as did productivity growth, which is now at levels higher than before the pandemic. Consumer spending is surging ahead of economists’ forecasts, driven by strong consumer sentiment.
The Biden administration, which retained Trump’s tariffs and began pumping billions into US high-tech manufacturing via the Inflation Reduction Act and the CHIPS Act, has succeeded in growing the US manufacturing workforce. Despite the Boeing strike, the US manufacturing workforce at the moment has not merely recovered from the pandemic but is now greater than under the Trump administration. Another blue-collar industry, transportation and storage, has expanded by more than 1 million workers under Biden (utilities employment has also grown significantly). And construction has added 800,000 workers under Biden compared to Trump — though given the large number of undocumented workers in US construction, that might not be a result to appease blue-collar white male Trump voters.
Biden has also been good for business. Corporate profits after tax are now growing more consistently than at any time under Trump before the pandemic. The Dow Jones index hit a record high in mid-October and has spent the entirety of the Biden administration at levels significantly higher than under Trump, as has the Nasdaq index, demolishing the myth that Trump and the Republicans are better economic managers for business. To help with the wealth effect for Americans, median house prices have been above Trump-era levels for the entirety of Biden’s presidency as well — in fact, median house prices were actually falling in 2019 under Trump before the pandemic set in.
Biden has also overseen the rise of a new industry. US tech giants are planning to spend US$200 billion over the next year on artificial intelligence, led by Nvidia, which was a minor player in graphics chips when Trump was in power.
The only significant Biden failure, one he shares with Congress and legislators on both sides, is the US budget deficit, which began increasing in 2024, even if the wild spending of Trump’s last year was brought under control. Previous Democrat presidents Carter, Clinton and Obama all oversaw smaller deficits or bigger surpluses than their Republican counterparts, but Biden and the current Congress are on course for a deficit of 7% of GDP this year.
Otherwise, Biden has delivered falling inflation, rising incomes, a very strong jobs market, increasing blue-collar employment (especially in manufacturing), a booming stock market and consistently strong corporate profits. The Biden economy tilted back in favour of ordinary Americans without damaging corporate profits, while strengthening the US economic position in regards to China, which Trump promised to do and dramatically failed to deliver.
When people vote for Trump, it’s nothing to do with the American economy.