Top line
The labor market is always a sensitive topic ahead of a presidential election. During Joe Biden’s presidency, the labor market has performed much better in nominal terms in terms of total jobs created and the unemployment rate than under Donald Trump. But this is far from the whole story, and Trump has a significant lead in one important area.
Donald Trump (left) and Joe Biden at a debate in 2020.
Key data
At the highest level, Biden has a massive advantage over Trump.
The U.S. added 15.8 million jobs during Biden’s first 42 months in office, compared with a decline of 2.7 million during Trump’s presidency, according to total nonfarm payrolls, the most commonly cited measure of total employment that captures most American workers.
Likewise, the unemployment rate rose by 1.7 percentage points from 4.7% to 6.4% under Trump and fell by 2.1 percentage points to 4.3% under Biden.
However, the gross data do not paint a complete picture of the strength of the labor market under both presidents, as the Covid-19 pandemic disrupted the global economy starting in 2020, briefly pushing U.S. unemployment to a record 14.8% in April 2020, following a decline of 22 million workers between February and April 2020.
This distorted Trump’s numbers negatively and Biden’s positively as the labor market returned to relative normality after the unprecedented shock.
In fact, the first three-quarters of Trump’s term was marked by a remarkably strong labor market: Between January 2017 and February 2020, nonfarm payrolls grew by about seven million, and unemployment fell from 4.7 percent to 3.5 percent over the same period. This was the lowest level since 1969 at the time and was later surpassed by 3.4 percent in January and April 2023.
Was wage growth better under Biden or Trump?
Wage growth has been slightly higher under Biden. Average hourly wages have risen 17% so far under Biden, compared to 15% during Trump’s presidency. But Trump-era wage growth has been much higher for Americans, as it has outpaced inflation by a greater margin. The Consumer Price Index rose 8% from January 2017 to January 2021, compared to 19% from January 2021 to July 2024. According to the Bureau of Economic Analysis’ monthly personal savings rate, Americans saved an average of 8.7% of their monthly salary under Trump, compared to 5.9% under Biden.
Important background
Increased purchasing power is perhaps Trump’s greatest achievement in leading the world’s largest economy. This is reflected in polls that show only 19% of Americans believe they are better off financially since Biden took office, while 50% say they are worse off. Just as Biden’s economy benefited greatly from inheriting a weak labor market, it was similarly doomed by battling a global inflation crisis that was partly due to a number of factors outside Washington’s control, such as supply chain delays caused by COVID-19. Still, the U.S. economy has been remarkably strong under both presidents. Gross domestic product, which measures the total value of all goods and services produced in the United States, has increased 50% from 2015 to 2023. Under both presidents, the unemployment rate was below the level seen during Barack Obama’s entire presidency from 2008 to 2016, which was overshadowed by the aftermath of the financial crisis (except for the pandemic-related outlier from 2020 to 2021).
What you should pay attention to
The labor market is at a potential turning point: unemployment rose in July to its highest level since October 2021 and monthly employment growth reached its second weakest level since 2020.
tangent
Both Biden and Trump described their labor markets as signs of the “great American comeback.”
More information
