An elephant riding a donkey: The economy Joe Biden left to Trump

It was precisely the hopes for rapid economic growth and more business-friendly policies that secured Trump the support of entrepreneurs. Throughout his campaign, he blamed Joe Biden for fueling inflation. Yet in the weeks after Trump took office, consumer prices saw their highest increase in a year and a half. The outlook is only getting worse, with forecasts predicting that inflation will accelerate following Trump’s statements about raising tariffs on imports from China, Mexico, and Canada.

Biden’s economic record: GDP, stock market, and job growth

When Joe Biden took office in 2021, the country was still dealing with the fallout from the COVID-19 pandemic, which had led to a decline in real GDP. The Democrat focused his efforts on economic recovery, and by the time he handed power over to Trump, real GDP growth was back up to the 2-3% range.

Throughout Biden’s presidency, economic growth outpaced forecasts. In 2023, U.S. real GDP growth was the highest among G7 countries, and preliminary estimates suggest it will maintain that position in 2024, surpassing the EU average by a factor of three. Under Biden, real GDP consistently exceeded potential GDP — the theoretical maximum output an economy can achieve with optimal resource use. This phenomenon, known as a positive GDP gap, indicates that the economy was operating at full capacity thanks to strong consumer demand, driven by steadily rising incomes.