How Biden’s economy compares to Trump and Obama and why he’s less popular than his predecessors

After a successful midterm election Joe Biden is ready to begin the second half of the first term of his presidency.

Biden crossing the bumpy road: The ride for Biden has been bumpy so far. As with his predecessor, the rise to the highest office did not go smoothly donald trump took offense at the election verdict and vehemently demanded that it be annulled.

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What happened just before the inauguration on January 20, 2021 marked one of the darkest periods in American political history as Trump fanatics stormed in Capitol and incitement to violence. After the dust settled and the president got back to business as usual, things went fairly smoothly for the first few months amid an economy that was ailing after the COVID-19 devastated.

Biden’s first biggest challenge was the gallop consumer price inflation. Fiscal and monetary stimulus, sympathetically given to boost an economy battered by the COVID-19 pandemic, began to stoke price pressures. After bottoming out at 0.3% in May 2020, annual inflation reversed course and exceeded the Fed’s 2% target in March 2021. After that it went up steeply until June 2022.

Source: Bureau of Labor Statistics

The Fed had to act to curb inflation, although critics blamed the central bank for a delayed policy response. Monetary policy normalization started in March 2022, but financial markets started a downtrend earlier, pricing in potential interest rate hikes and their impact on economic growth.

the Russia-Ukraine War couldn’t have come at a worse time. The war in Eastern Europe put further pressure on prices and added to inflationary pressures.

Here’s a look at how Biden’s tenure compared to that of Trump and his predecessor Barack Obama on different fronts:

For comparison purposes, Barrack’s first two years of his second term (2013-14) and Trump’s first two years (2017-18) are considered. It’s important to be aware of the fact that an apples-to-apples comparison is unlikely given the different economic and geopolitical variables each of them may have faced during their tenure. It can be argued that the economic situation is to some extent a function of an administration’s policies.

economic growth: Gross domestic product, a broader measure of overall economic output, benefited from a strong rebound in the first year of Biden’s presidency from a 2.8% contraction amid the 2020 pandemic. When the economy rebounded sharply in 2021, growth surged 5.9%, thanks to stimulus measures.

The reigns of his predecessors experienced fairly trouble-free growth, slightly below the long-term trend. It is worth bearing in mind here that pre-COVID-19 the economy settled in a range of around 2% after emerging from the Great Recession of 2007-2009.

Source: Self-created chart using data from the Bureau of Economic Analysts

*Growth in 2022 is a Conference Board estimate as official figures for the full year are not yet available

Market performance: Biden was unlucky to be caught in the wake of multiple headwinds that weighed on the stock market. The stock market is often viewed as a barometer of a nation’s economic health as it reflects the fortunes of companies in the sectors that often serve as the lifeblood of the economy.

The post-COVID-19 rebound manifested in stock markets took major US averages to record highs in 2022, and the descent from there has been steep, dampening average returns S&P500 for the two-year period.

the SPDR S&P 500 ETF Trust SPYan exchange-traded fund that tracks the performance of the S&P 500 Index is up 5.3% over the two years under Biden.

Obama’s average two-year return during his second term was better than comparable policies for his two successors.

Source: Self-made diagram

Popularity rating: Biden started his presidency on a positive note from an approval ratings perspective. Immediately after his inauguration, he enjoyed an approval rating of 53%, according to data compiled from all FiveThirtyEight polls. By August 2021, the percentage of people who approve of him fell below those who disapproved of him. At the end of 2022, the proportion against him was 51.3% to 43.3%.

The comparison with Trump shows that Biden had the upper hand in terms of popularity for most of the first two years.

Source: Thirty-five

FiveThirtyEight’s comparison of Biden vs. Obama used combined data from the first two years of both Obama administrations. It shows that Obama consistently enjoyed a better approval rating than Biden.

Source: Thirty-five

Way Ahead Risky: The US economy is threatened with a recession and uncertainty about interest rate developments persists. Geopolitical risks abound as the war between Russia and Ukraine continues and relations with China remain lukewarm with the risk of a flare-up at any moment.

Additionally, with the midterms, the Democrats ceded control of the House of Representatives to the Republicans, which could lead to further arguments over policy action. The one area where Biden unquestionably won was a set of legislation he passed, using the control his party had over Congress for the first two years.

Biden is likely to have a tough time in the second half of his tenure, and it remains to be seen how he and his party lead the economy and the nation through these challenging times.

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