Does the US economy care who is president?

A lot of time, effort and money goes into presidential and national elections in the United States, and this year is no exception.

But combing through the data since 2009 shows that no matter who was in power, the economy seemed to be equally driven by global events, demographic developments and decisions made in the White House. 

The period from 2009 to 2024 covers both of Barack Obama's two terms in office, plus the single terms of Donald Trump and Joe Biden, whose presidency is now coming to an end.

Looking back at Obama, Trump and Biden

There were two major disrupters for the economy during this period. The first was the financial crisis that started before Obama took office in January 2009, and the second was the COVID-19 pandemic that struck in the final year of the Trump administration in 2020.

The financial crisis led some to fear the collapse of the entire banking system. Soon afterward, GM and Chrysler, two of the biggest American carmakers, declared bankruptcy to reorganize their businesses, and the housing market, specifically mortgages, spun out of control.

The COVID-19 pandemic had a more immediate impact on the US and global economies. Lockdowns, shortages due to delicate supply chains and the closure of borders caused deaths, economic chaos and massive job losses.

Partly through large stimulus checks, the US managed to quickly escape the pandemic slump, picking up where the economy left off and creating a strong recovery.

American GDP vs. other economic giants

One problem comparing the impact presidents and their policies make is the lag in time it takes for their decisions to make a difference. Investing in infrastructure or industries like chipmaking is necessary, but the benefits are only felt way in the future. Tightening the border to Mexico may keep out some migrants, but the impact of missing workers takes time to affect supermarket prices.

Another problem is assessing the impact of presidents separately from decisions made together with policymakers in Congress or independent institutions like the Federal Reserve.

Since 1990, American gross domestic product (GDP) per capita has grown each year except 2009, and that was another knock-on effect of the financial crisis. Last year, the country's GDP per capita was over $81,000 (€74,700).

At the same time, when it comes to the annual percentage of growth per capita, China and India have had stronger growth. Despite this higher growth rate, America's per capita GDP is still three times higher than China's and eight times higher than India's.

In 2023, America's overall GDP was an astounding $27.36 trillion, making it by far the biggest economy in the world. China came a distant second at $17.66 trillion, followed by Germany and Japan.

Many jobs for many people

In the first few months of Obama's presidency, unemployment went up because of the financial crisis. From April 2009 to September 2011, it was at 9% or more.

After that, the unemployment rate slowly crept down until it reached its lowest level since the 1960s before a short-lived spike during the COVID-19 pandemic, which put many out of a job. This year, it has hovered around 4%.

On another front, American workers are more productive than workers in other nations thanks to innovation, spending on research and development and the willingness of workers to change jobs or move.

Pay inequality at the bottom

Another measure that has increased is pay inequality: America is the most unequal country in the G7 group. The top 1% of Americans hold a huge proportion of the country's wealth.

In the US, to get into the top 1% of earners requires an annual household income of around $1 million a year before taxes. In the United Kingdom, it only takes around $250,000.

The salary of company bosses was over 250 times more than their average employee, Obama wrote in an open letter to his successor in The Economist in October 2016.

Moreover, in 1979, "the top 1% of American families received 7% of all after-tax income. By 2007, that share had more than doubled to 17%," he wrote. More positively, the proportion of people living in extreme poverty fell.

Migration is changing America

Irregular migration into the US is hard to measure, but documented migration can be counted. One measure of this is the number of green cards granted, and from 2009 to 2022, over 14 million people were given such status.

The foreign-born population living in America, legally or otherwise, has grown considerably over the past 50 years in size and share of the population, according to a report issued by the US Census Bureau in April.

In 1970, there were 9.6 million foreign-born residents. By 2022, there were over 46 million, or nearly 14% of the total population.

Of the overall total, nearly one-third of the country's foreign-born population came to the US in 2010 or later, and half live in just four states: California, Texas, Florida and New York. More than half have become citizens.

High inflation comes to America

Since January 2009, inflation has gone on a wild ride, based on the Consumer Price Index.

When Obama took office, inflation was at zero, went into negative territory and eventually climbed to a high of 9.1% in June 2022. This past September, it was down to 2.4%, the lowest since February 2021.

This relatively short period of higher inflation is having a long afterlife and has led to big cost of living increases for many Americans.

Consumer prices are up, and voters are very unhappy about it. It's one of the most important issues this year and could decide the election in swing states. It's also one of the hardest things for any president to control.

Edited by: Uwe Hessler