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Jobs, inflation, wages: How the economy has fared under Trump and Biden

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Jobs, inflation, wages: How the economy has fared under Trump and Biden

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The race for president and all the other offices up for grabs isn’t just about the economy but that’s routinely ranked as one of the top concerns − if it’s not No. 1 − on the minds of voters.

Republican former President Donald Trump argues that the Democrats under President Joe Biden and Vice President Kamala Harris, her party’s nominee this fall, have wrecked the economy. Harris, meanwhile, has acknowledged that inflation has hurt many families while also noting the gains made in jobs and investment while Biden’s been in office.

Campaign rhetoric can be purposely misleading and confusing, so we thought we’d take a step back and look at the economic data points across the U.S. and, where possible, in Michigan, under both the Biden administration and while Trump was president (and, yes, taking into account the shutdowns during the COVID-19 pandemic).

First, let’s talk about jobs.

Frankly, before and after COVID-19, both presidents can claim periods of relatively low unemployment.

Under Trump, the national unemployment rate fell from 4.7% when he took office to 3.5% the month before COVID hit. By the time he left office in January 2021 it was at 6.4% (and had gone a lot higher than that during the shutdowns). Under Biden, it fell as low as 3.4% last year and in August was 4.2%, still relatively low.

Among Black workers, the lowest unemployment rate during Trump’s term was 5.3% in September 2019. It got as low as 5.2% in December 2023, under the Biden administration. Trump did have a slightly better figure, 3.9% unemployment, among Hispanic workers in September 2019 compared to Biden’s lowest month among Hispanic workers, 4% in November 2022.

Nationally, about 15.9 million nonfarm jobs have been added during Biden’s term, an increase of 11.1% over January 2021, when he entered office. Under Trump, about 6.7 million jobs were added before the COVID-19 pandemic – we’re using data from February 2020 as the demarcation of that as shutdowns began the following month – for an increase of about 4.6% during his term until that time.

Trump’s term ended, however, with an overall loss of 2.7 million jobs nationally compared to when he took office.

If you look at how many jobs had been added to the economy as of August of this year compared to February 2020 before the pandemic shutdowns began, it’s about 6.5 million, or about 4.2%.

As Trump claims, many of those added jobs could be considered “bounce back” jobs as the economy reopened. But given Trump’s rhetoric that Biden has ruined the economy, the current president can make just as reasonable a case that he helped restore a pandemic economy that was struggling mightily when Trump was president (though Biden and the Democrats have downplayed the impact the pandemic had on job losses at the end of Trump’s term).

Either way, it’s also true the pandemic has been over for years now and job growth has been consistently strong even taking the economic turmoil it caused in the job market into account. (By the way, during former President Barack Obama’s second term more than 10 million nonfarm jobs were added.)

A similar trend has played out in the manufacturing sector nationwide. By the time COVID hit, about 414,000 new jobs had been added during Trump’s term, an increase of 3.3% (which was comparable to Obama’s second term). By the end of Trump’s term, manufacturing jobs had decreased overall, losing nearly 180,000 jobs compared to when he took office, only to bounce back during Biden’s term. Compared to the end of Trump’s term some 739,000 jobs were added, a growth rate of 6%; compared to the sector’s job numbers pre-COVID the increase was a little over 1%.

And motor vehicle manufacturing jobs (and we’re not counting parts suppliers here)? It’s similar again, though even more stark. Under Trump and prior to COVID, about 29,000 new jobs were added, an increase of nearly 14%. But under Biden, some 62,500 auto-making jobs have been added, a 25% increase – and that’s from the pre-COVID total, not the end of Trump’s term (it’s up nearly 30% from then).

A look at inflation nationally and in Michigan

Even as more jobs have been created overall in Michigan and across the U.S., many voters are concerned about inflation, which skyrocketed as the economy began to reopen during Biden’s term following the pandemic and has continued to grow, even though the rate of increase has leveled off in recent months.

For what it’s worth, Republicans have blamed Biden and the Democrats for inflation but before we look at levels in the U.S., it’s of note that pretty much every other developed country has experienced higher-than-usual levels of inflation in recent years and it’s not been particularly worse in the U.S. compared to those other countries.

Looking at the overall increase in inflation between the beginning of 2021 and the third quarter of 2023 (the most recent period tracked widely by the Organisation for Economic Co-operation and Development, or OECD, which is made up of 38 member countries from around the world), the U.S. saw prices rise by 16.6%. That’s less than the OECD average of 21%. (Again, that’s using the methodology the OECD uses to compare and track prices around the world). The U.S. rate was slightly higher than some during that period, like Canada (14.1%) and Germany (15.7%) and lower than others, like the United Kingdom (18.3%).

It’s also worth noting that in Hungary – where Viktor Orban, who is regularly praised by Trump as a world leader, is prime minister – inflation went up nearly 40%.

But there’s no question that prices in the U.S. have been up, dramatically, overall.

According to the Bureau of Labor Standards, the Consumer Price Index for U.S. cities (CPI-U) – one of the standard measures of price increases – had increased by nearly 20% as of this August compared to January 2021, when Trump left office. (It’s untrue for Trump to say, as he sometimes does, that there was no inflation when he was in office, however. In fact, the CPI-U increase was higher, at 7.8%, during his term than it was during Obama’s second term.)

Still, there is no question that many consumers are feeling the pinch of high prices. (By the way, inflation hikes in the Midwest region, which includes Michigan, were also up by about 21% in August compared to January 2021’s CPI-U, so it’s virtually identical to the national figure.)

Want to know about some actual prices? Here’s a handful.

White bread, for instance, in the Midwest was up 44% from January 2021 to $2.05 a pound. The cost of shelter – either in the form of rent or its equivalent calculated for homeowners – was up nearly 25%. The cost of electricity was up nearly 30%.

But some items have dipped in price, even if they remained above where they were in January 2021. A gallon of unleaded gas in the Midwest region, for example, was $3.44 on average in August, down from over $5 in June 2022 but still higher than $2.24 in January 2021. A pound of bacon – something Trump often mentions on the campaign trail as having become unaffordable – was $6.49 in August, down from its high of $8.09 in October 2022. (It was $5.86 when Biden took office.) A dozen large eggs were $3.17 on average in August, down from $4.44 in January 2023 but still more than double their cost ($1.40) in January 2021.

Are Americans still suffering from sticker shock? Yes, but consumer sentiment – as measured by the University of Michigan’s monthly survey of consumers – has been on the upswing, with its preliminary index hitting 69 for September, which is well off where it was in early 2020 (when it was at or over 100) but well above the low of 50 in June 2022. (To come up with the index, researchers survey hundreds of people, asking a large number of questions about the economy and their personal spending and compare pessimistic answers to positive ones; the index is considered an important measure of where consumers believe the economy is headed and whether they are inclined to spend more or not in the future.)

How about earnings?

Finally, there is the question of whether wage gains – which were higher than usual in the wake of the pandemic – made up for inflation.

It’s a difficult, if not impossible question to answer really, since it depends on your personal circumstances. If you didn’t get the raise your neighbor did, then the higher cost of a gallon of milk presumably hits you harder than it does her. And wage gains are different across regions, industries and occupations.

But we can talk about it broadly speaking nationally and in Michigan.

Across the U.S., the average hourly earnings for workers (which includes wages, overtime and commissions) in private sector jobs rose nearly 18% to $35.21 as of last month, compared to when Biden took office. The average was basically the same for nonsupervisory and production workers but their earnings grew slightly more compared to January 2021, at 20%.

The increases were consistent across a lot of sectors, too. In health care, construction and manufacturing, hourly earnings went up by nearly 20%. It was even higher in leisure and hospitality at almost 30% but those workers started at a much lower hourly level. Also, by way of comparison, average weekly earnings went up by about 16% while Biden’s been in office. (They also increased by about that much when Trump was in office but really took off after the pandemic hit; before that, the gains were similar to those during Obama’s two terms.)

The Bureau of Labor Statistics, from which these figures were compiled, didn’t have an average hourly wage figure for private sector workers in Michigan to compare the national figures to, but it did have average weekly wages by quarter.

That showed that, in the first three months of 2021, when Biden took office, the average weekly wage in Michigan was $1,162. By the first quarter of this year – the most recent data which is available – that had grown to $1,362, an increase of 17%.

A few final points

Regarding those wage gains, it’s worth noting that the Economic Policy Institute, a nonpartisan but liberal-leaning research organization in Washington, found that wage gains for lower- and middle-wage workers outpaced those of higher-wage earners through 2023.

That report also found “particularly fast wage growth” for Black men, younger workers and working mothers. It also said that minimum wage increases in many states, like that passed in Michigan, helped.

Here are some other economic data points to wind up: During Trump’s tenure in office, the Dow Jones Industrial Average and the Standard & Poor’s 500, two leading stock market indexes, increased substantially, with the former rising by about 57% and the latter by about 70%. Under Biden, both have continued to rise: the former by about 37% and the latter by about 49%.

Also, according to data compiled by the Federal Reserve Bank of St. Louis, the nation’s gross domestic product at an annualized rate grew about 28% during Biden’s term, compared to about 18% during Trump’s term. (It was a bit higher when Trump left office than it was when COVID hit.) On a per capita basis. GDP − essentially the value of goods and services produced in the nation over a specific time − has grown more quickly to date under Biden than it did Trump as well.

Contact Todd Spangler: tspangler@freepress.com. Follow him on Twitter@tsspangler. 

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