Biden Inherits a Robust Economy from Trump with Minimal Unemployment and Stable Inflation
Are we better off than we were four years ago? This was the question asked by Ronald Reagan one week before the 1980 presidential election. This question has since become a standard for measuring an incumbent’s success. President-elect Biden inherits a strong economy, with low unemployment rates and manageable inflation. However, the escalating public deficit and debt remain significant issues.
While Trump continues to claim he will quickly fix the disastrous economy, the reality is that the U.S. economy is in a soft landing phase due to the Federal Reserve’s strategic monetary policies. The soft landing term, borrowed from aerospace terminologies, denotes managing inflation without inducing a recession or massive job lay-offs.
Trump seized skewed October data, resulting from hurricanes and the Boeing strike that created only 12,000 net jobs, to critique Biden’s economic governance. Despite his claims, during Trump’s reign and amid the Covid-19 pandemic, a whopping 20.5 million jobs were lost, and only 5,000 jobs created during February 2019. When he left the office in December 2020, the country had fewer jobs than when he entered the White House.
Conversely, under Biden, the U.S. has seen job creation in every month of his presidency, contributing to 16 million new jobs. The unemployment rate, which was 6.7% at the end of 2020, is now 4.1%, thereby making it 26 consecutive months of being below 4% – the longest ever in the past 50 years.
The nation’s GDP fell by 2.1% in Trump’s last year in office, with a total of only 5.8% growth over his term. In contrast, the U.S. economy has grown 15.5% in Biden’s first three years, even considering the effects of the pandemic.
Inflation remained Biden’s primary economic challenge, leading to Trump’s election victory. Despite this, the issue seems to have been largely addressed, with a recorded price increase of just 2.4% over the past 12 months compared to 2.5% during Trump’s pre-pandemic year.
Despite lower inflation, the prices haven’t returned to pre-inflation levels, causing voters to reminisce about the cost of living four years ago. However, it’s essential to note that wages have increased too. The real disposable personal income, adjusted for inflation, has increased by 10%. Household net worth has significantly risen due to thriving house prices and the stock market performing positively.
One of America’s major economic challenge is its public deficit, standing at 6% to 7% of GDP, and the federal debt that has increased by more than $7 trillion during Biden’s term. Trump entered the election without any credible proposals to address these issues.
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