Voters prioritized the economy in the 2024 election, sending Donald Trump back to the White House. But what economic legacy is Joe Biden passing on to the new administration?
“It’s the economy, stupid.” Coined by political strategist James Carville, these famous words have become synonymous with U.S. election success since 1992.
Despite the growing influence of issues like immigration, climate change and foreign policy, many voters still prioritize economic factors when casting their ballots.
President-elect Donald Trump claimed he made “the greatest economy in U.S. history” during his first term and vows to do so again in 2025. But a lot depends on what a president inherits from his predecessors.
Low unemployment rates and a soaring stock market built under former President Barack Obama’s administration following the 2008 financial crisis gave Trump a strong foundation the first time around.
So, what economic legacy will Trump inherit from Biden?
Simply put, high employment rates, strong GDP growth and low inflation often characterize a healthy economy.
The country was still recovering from the COVID-19 pandemic when Biden was sworn in, but the last four years have proven resilient.
Biden’s administration created almost 16 million new jobs in America — a key sign of positive economic growth.
That good news was overshadowed for many Americans by inflation, which reached a 40-year high in 2022, with prices increasing by 9.1%. That impacted people’s purchasing power and made everyday items feel expensive.
Annual inflation has now eased to around 3% but is still higher than the Federal Reserve’s 2% target, and prices for many items remain significantly higher than at the end of Trump’s first term.
While real wages have since increased in America, workers may still feel the strain of stubbornly high grocery prices.
This was a global issue linked to supply chain challenges and Russia’s war with Ukraine, and ordinary people paid the price. But massive deficit spending under Biden to head off the threat of a major recession also contributed.
Biden has preferred to emphasize the promising picture of the jobs market he’s passing on, noting that the United States recorded its lowest unemployment rate in more than half a century during his term.
About 2.7 million jobs were lost during Trump’s first term, partially due to the COVID-19 pandemic. So, he’ll face pressure to turn that legacy around. But Trump has already suggested mass layoffs across federal departments during his second term, which could increase unemployment rates if implemented.
Another broad signal of a healthy economy is the increased value of goods and services, or GDP, which shows whether an economy is growing.
The United States has long had the largest GDP in the world, surpassing nations such as India and China.
GDP rose 7.6% during Trump’s first administration and increased by 11.8% under Biden, suggesting a strong post-pandemic recovery.
Generally speaking, Biden’s economic legacy is one of high employment, recovering GDP and declining inflation.
But no president ever inherits a clean slate. The federal debt stands at $36.1 trillion, and public opinion about the economy is, at best, lukewarm.
Some financial experts predict inflation may continue declining in 2025, but a broader context of geopolitical tensions, trade wars and climate change may also shape America’s financial future.
Trump’s task will be to sustain economic momentum while navigating the complexities of a rapidly evolving world.
