Unemployment and Presidential Performance - Which Party is Better?

October 12, 2024 

We could spend an eternity refuting the claims of former President Trump on the performance of the U.S. economy during his term in office. Yes, we had the once in a century disaster of a world-wide pandemic that brought the economy to a halt, but he likes to state without reference to any data points, that the U.S. economy during his term was the best in memory if not history. These grandiose claims demand the light of data. 

According to leading political pollsters, the economy is the number one issue Americans are concerned about in the 2024 presidential election. A recent Pew Research report states that concern about the economy (81%) rank higher than health care (65%), and Supreme Court nominations (63%), the next two most important issues. Interestingly and not surprisingly, there are differences in the views of what are the most important issues dependent on whether you are a Trump supporter or a Harris supporter. Trump supporters rank the economy (93%), immigration (82%) and violent crime (76%) as the top three issues. Harris supporters rank healthcare (76%), Supreme Court nominations (73%), and the economy (68%) as the top three issues. The economy is clearly on the minds of American voters this fall.  

Economists measure hundreds of economic phenomena, including inflation, GDP growth, personal income growth, international trade, government debts and deficits, labor force participation, productivity, stock prices, interest rates, and income and wealth inequality just to name a few. The unemployment rate is perhaps the number that attracts the most attention by economists, journalists, workers, and government officials.  

It is important as we get close to election day that Americans know what the unemployment rate is and what it is not. It is also important to remind Americans of recent history on the unemployment rate over recent presidential administrations. 

The unemployment rate is calculated based on a survey of about 60,000 American households.  There are over 131 million American households. The sample size represents about five households out of every ten thousand households. While that seems like a small sample, the sample is considered an accurate reflection for the total U.S. labor market.  

A person is unemployed only if they are not working any hours at the time of the survey, and they are actively seeking employment. Actively seeking employment is determined by a series of questions that identify specific activities by the sampled person showing that they are not just sitting on their couch. The survey is conducted and reported monthly. The September 2024 unemployment rate was 4.1 percent. 

The unemployment rate is calculated by dividing the number of unemployed persons by the number of people in the labor force.  The labor force equals the total number of employed workers and unemployed workers. 

Curiosity drove me to look at how previous presidential administrations performed on this important metric. Every president inherits an economy from their predecessor. It is also true that presidents get too much credit for unemployment rate successes and too much blame for unemployment rate problems. Despite this lack of a direct relationship between presidential policy and unemployment rates, presidents are lauded for their unemployment success and excoriated for their failures, often in the form of being voted out of office. The buck does stop at the Resolute Desk in the Oval Office, but American voters determine who is sitting at that desk. 

Since the Carter Administration in 1977, there have been eight presidents including President Carter and ending in President Biden. One measure of their performance on unemployment rates is to look at the rate at the time their administration started and what that number was at the end of their administration. The chart below shows the unemployment rate when the administration started, ended, and the highest unemployment rate during their term. 

President Beginning Rate Ending Rate  Highest Rate 

Carter  7.5 percent  7.5 percent  7.5 percent (1/1977) 

Reagan  7.5 percent  5.4 percent  10.8 percent (11/1982) 

Bush I   5.4 percent  7.3 percent  7.8 percent (9/1992) 

Clinton  7.3 percent  4.2 percent  7.3 percent (1/1993) 

Bush II  4.2 percent  7.8 percent  7.8 percent (1/2009) 

Obama  7.8 percent  4.7 percent  9.9 percent (12/2009) 

Trump  4.7 percent  6.4 percent  14.8 percent (4/2020) 

Biden   6.4 percent  4.1 percent  6.4 percent (1/2021) 

Presidents are stewards of the national assets. Presidents Reagan, Clinton, Obama and Biden all ended their terms with unemployment rates lower than the rate they inherited. President Carter ended his term with the same unemployment rate that he inherited. Presidents George HW Bush, George W. Bush, and Donald Trump all ended their terms with unemployment rates higher than the rate they inherited.  While the sample is limited, all Democratic presidents had positive economic terms and all but one Republican president had negative experiences. The facts conflict with the conventional wisdom that Republican presidents are better for the economy than Democrats.  

Unfortunately for Democrats, Americans have short and distorted memories. The narrative that Trump presided over the “best” economy in American history, does not conform to the facts. Do American voters who were adults during these earlier presidencies remember their experiences during these times? It seems we do not.  Hopefully, this reminder will help American voters make decisions on which party or candidate is best for the economy based on the facts, and not what politicians falsely claim to be true.