As odd as the 2024 presidential rematch between Joe Biden and Donald Trump is likely to be, one familiar pattern will likely hold: The state of the US economy will be the main issue for voters.
With Trump’s victory in the New Hampshire primary election on Jan. 23, Trump now appears destined to win the GOP nomination, setting up a 2020 redo. Needless to say, there are anomalies this time around. Trump is a defendant in four criminal trials involving 91 felony charges. Biden has to explain away the worst bout of inflation in 40 years. Both candidates are older than most voters prefer.
Yet the fact that both men have served as president gives voters a clear record to judge each candidate by. Yahoo Finance has tracked the economic performance of both Trump and Biden since Trump first took office in 2017, using data provided by Moody's Analytics. Our methodology has been the same for each president, allowing for the apples-to-apples comparisons you see in the charts below. (Click the arrows to move through the data.)
On seven key metrics, Biden has a 4-3 edge. Biden bests Trump on overall job growth, manufacturing jobs, GDP growth, and exports. Trump wins on stock market performance, real-income growth, and low inflation.
If the economy holds up during the rest of 2024, as most economists expect, Biden will sustain that 4-3 advantage in our tracking. We measure the current president’s economy against prior presidents at the same point in their term. The COVID pandemic dominated Trump’s fourth year in office, wrecking Trump’s stats on employment and GPD growth. So a head-to-head comparison favors Biden for the next 10 months and if stocks do well he could beat Trump there also, for a 5-2 edge in our seven metrics.
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But that’s not the whole story. Inflation has been Biden’s biggest economic problem, and even though the rate of price increases is getting back to normal, it’s clear that many voters still feel stung by prices that have risen and stayed there. Until recently, confidence measures were at recessionary levels, despite an extraordinarily strong job market. Consumers are gradually feeling better as gas prices drop and food prices moderate. Yet Biden’s approval rating plunged as inflation was worsening in 2022, and has never recovered.
The COVID pandemic, even though it’s over, is another wild card, because it colors how Americans interpret the Biden and Trump economies. The Trump economy was generally doing well until COVID arrived in 2020, triggering a short but deep recession and vast amounts of fiscal and monetary stimulus. The recession hurt the Trump economy, obviously, but the stimulus generated a strong recovery and a stock market boom just as Trump was leaving office. Should Trump get credit for a huge stock rally driven largely by the Federal Reserve’s monetary easing?
Biden came into office as the stimulus-induced COVID recovery was picking up steam, which is a big reason Biden’s employment and GDP numbers are strong. But all that stimulus, combined with COVID-related distortions such as wrecked supply chains and a surge in demand for goods, pushed inflation to 9% in 2022, the highest level since 1981. Should Biden get credit for all those new jobs? Or should Congress and the Fed? And if you credit Biden with strong job growth, shouldn't you also blame him for inflation? Or vice versa?
To put it another way, if Biden were president when COVID hit, the recession-stimulus-recovery cycle would probably have been very similar to what Trump oversaw. And if Trump began a second term in 2021, he probably would have faced the same paradox as Biden: record job growth but unnervingly high inflation. Presidential candidates exaggerate their powers and voters sometimes believe them, but presidents alone don’t do a lot to move the economy one way or another.
There’s a distinct difference, of course, between the policies each candidate says he’ll pursue if he wins in November. The incumbent Biden wants to raise taxes on businesses and the wealthy, implement more social benefits, continue the green energy transformation, and aggressively confront aggressor nations such as Russia and China. The challenger Trump would keep taxes where they are or cut them further, slash government, ditch green energy incentives, drill more oil, and broadly withdraw the United States from global conflicts. Maybe that will be enough for voters to go on when they vote 10 months from now.
Rick Newman is a senior columnist for Yahoo Finance. Follow him on Twitter at @rickjnewman.
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