The Relative Performance of the Economy under the Presidents of the United States from 1900 to 2023

Revised September 2024*

Samuel H. Williamson

Founder of MeasuringWorth

 and 

Professor of Economics Emeritus Miami University 

sam@mswth.org

Economic performance has been an important issue in elections for decades. Voters look at economic variables to gain some insight into the incumbent's record. The health of our economy, however, is determined by monetary and fiscal policy, external shocks, and even bubbles. The economy faced by an incumbent president and Congress, good or bad, is the result of events that occurred before as well as during his term of office. Elections have been won and lost by the timing of the business cycle where incumbents were caught on the right or wrong side of the slope. Of course, this does not stop claims and blames during election campaigns. Some are rhetorical, such as "the best economy ever" or "you are worse off than you were two or four years ago." Others are specific such as "your taxes are higher today than they were" or "the unemployment rate fell last month." In many cases, these statements have little context or are misleading. For example, taxes may be higher than four years ago, but at that time, there may have been a one time rebate to deal with a recession. The unemployment rate may have fallen but from an unusually high rate. 

The goal of this paper is to help the reader better understand how the economy performed during each of the presidential terms from 1900 to 2023. It has been updated in the summer of 2024, so that data from the Trump term are complete and the first three years of the Clinton, Bush, Obama, Trump and Biden administrations can be compared. Data on important aggregate economics measures are presented in the 11 tables and discussed in the text so that readers can be better informed as they make their own conclusions on these issues.

Sources 

MeasuringWorth is a website devoted to presenting the best historical time series of economic data and providing comparators that help make useful comparisons of these data. The tables presented here can be reproduced easily using data from the MeasuringWorth website, FRED, and government sources. They can be studied using the site's Annualized Growth Comparator, which analyzes the growth of dozens of variables. The tables use annual data from 1900 to 2023 augmented by quarterly or monthly data from the post-World War II, the earliest the more frequent data were measured.

Comments on Data.

Gross Domestic Product (GDP) is the total market value of all final goods and services produced. The values posted are the measures of this flow in a quarter or a year.¹ This flow is not constant during the period. There are more goods and services produced on a Tuesday afternoon than at 3am on a Sunday morning. A year can start in a boom and be in depression by July. The annual observations will not reflect this change. Quarterly observations do a better job of measuring changes, but they still cannot date precise turning points.

 The Consumer Price Index (CPI) is a weighted measure of the cost of a bundle of things the average household buys. In theory it is the cost at a point in time and what we call a stock variable.² Tax rates, interest rates, home values and the price of gold are all stock variables. While there are earlier contemporary measures of prices and employment, the accuracy is far less than it is today. 

 There are many concerns when making comparisons over time. One is the problem that these variables may have the same name, but they measure different things. GDP is a total product of each year and, for example, in 2023, 1.4 billion smartphones were produced and in 1990 there were none. The typical household spends a large share of its budget on food in the 1930s. There was no internet and TVs in those days. There was no government agency measuring the GDP before WWII, so those observations have been estimated by historians. 

 The data are reported by each president. A separate observation has been created for those terms in which a Vice President succeeded to the presidency. In four cases, this was a result of the President's death; in one case, the President's resignation.³ For example, there is one observation encompassing FDR's first three terms, one for the term in which he died and Truman took over, and one for the term that Truman was elected. For the annual data we have set the length of a Presidential term as change in levels from the year the President was elected, to the year of the next election. Thus, we have four years of observations.⁴

 The quarterly data sets the term from the quarter they were elected to the quarter their successor was elected. These were the quarters before they were inaugurated. And for the monthly labor data, we've used the January observations of the year they took office to the January of the year they left office.⁵

 For all the data, to make comparisons of terms of different length we convert most of the observations to be the annualized growth rate.

 The first table presents annualized growth rates of key economic variables for the terms of 22 presidents. It covers real GDP, and real GDP per capita, the inflation rate, the growth in the S&P stock index, population, and the price of gold. Each variable has had its ups and downs (sometimes coincidental) during the presidential terms.

 Economic growth, measured either as the growth in real GDP or real GDP per capita, is the most often used measure of a President’s success in managing the economy, whether or not they have had any control over the sources of growth.⁶ The next two tables present various rankings of GDP growth.

 Inflation, as measured by the rate of increase in the CPI, was highest during the Wilson administration because of World War One and the Roosevelt/Truman term because of the ending of World War II price controls.

 Another period of high inflation is during the Nixon/Ford and Carter administrations when the Federal Reserve was increasing the money supply at a rapid rate. Ford and Carter were both criticized for not being able to bring inflation under control and both lost their elections of 1976 and 1980. Biden is receiving the same kind of criticism, but the recent inflation rate has been falling faster now than it did in those past years.

 Stock prices rose during every administration, except Hoover's. Only during the Nixon/Ford and G.W. Bush administrations did the stock index grow slower than the inflation rate. We will have more on stock index comparisons in tables below.

 Gold has only been a true market commodity for part of the time.⁷ It is easy to see the relationship between its price and the inflation rate during the Nixon Ford and Carter administrations. As inflation increased, gold was bought as a hedge against the falling value of the dollar. Gold prices and the stock market can be counter cyclical such as took place during the G.W. Bush administration.

 Population generally grew fastest during the first years of the 20th century, up to the 1920s with higher birth rates and immigration. The rate of growth dropped during the Depression, then increased because of the post-World War II baby boom. During the 21st century there has been a continual decline and is now at its lowest rate ever with continuing falling birth rates, and restrictions on migration relative to the first half of the 20th century.

 This table ranks the Presidents by the amount of annual growth in both real GDP and GDP per capita. For each President there were events that influenced growth during their term. Some might have been their policies; some might have been the policies of their predecessor; and most were probably other things that were beyond their control.

 Keeping these cautions in mind, we see at the top of the lists is FDR who took office near the trough of the Great Depression and died near the peak of a cycle near the end of World War II. Second to last is Roosevelt/Truman.⁸ This can be explained partly by the drop of the government share of GDP from 41% to 14% between 1945 and 1947.

 We also see that of the top seven administrations on the list, five are Democrats. While some of this is explained by business cycles, and war and peace, the higher ranking of Clinton and Carter administrations is not. Of the twelve at the bottom of the list, nine are Republicans.

 Trump is near the bottom because of the 9% drop in real GDP between last quarter of 2019 and the second quarter of 2020 during the Covid epidemic. To make comparisons of his relative performance without that event, we present his data without the last year.

 Table 3 separates the growth in GDP into the share contributed by government expenditures, and that from the private sector. Note, these are government expenditures and do not include transfer payments.⁹ The availability of the government share of GDP is not available until after WWII.

A perpetual platform of the Republican Party is to reduce the share of government in the economy. The Eisenhower and Nixon/Ford administrations were leaders in doing just that. Reagan and the Bushes were not able to follow this prescription as well and were worse at it than all Democrat administrations except Truman and Kennedy/Johnson. An increase in military expenditures shows up in the Truman administration with the Korean War, the Kennedy/Johnson administrations with the Vietnam War, the doubling of the defense budget during the Reagan administration,¹⁰ and the wars with Iraq by Bush presidents.¹¹

One way to see how well the private economy performs is to compare its growth rate with the growth of the economy as a whole. If the non-government economy is growing faster compared to the total, the more the economy is growing without the lead of the government sector. The second part of this table shows the difference between the two. The larger the number, the more the private sector is leading the economy. We see that peacetime presidents do the best. First it is Nixon/Ford, then Eisenhower followed by Clinton, Obama and Carter. Reagan, Biden, G.W. Bush and Trump are negative in this comparison as is Truman as was explained above.

 Table 4 presents the interest and maximum tax rates by each administration. The interest rate used is the federal funds rate. The tax rates are the maximum individual and corporate rates.

 Carter and Biden had the largest increase in interest rates for four years or less-, and as we mentioned above, both faced above average inflation rates. Higher inflation usually generates higher interest rates. The rate increases in 1928 were the FED’s attempt to dampen stock speculation. The 2.72% increase in the Clinton term reflects the problem of using just the first and last observations. The fast interest rate increase during the Biden term so far has been partly due to the FED maintaining a very low rate for two years from April 2020 to April 2022.

 The story from the maximum marginal income tax rates is consistent with political expectations; five of the eight times income tax rates were decreased; it was during a Republican administration. In only one case, Harding/Coolidge, does a Republican administration raise the maximum corporate tax rate. And in only one case out of the four times the maximum corporate tax was decreased was it done by a Democrat administration.

 The largest increase in the maximum of both taxes rates was to finance the two world wars, the largest decrease in the income tax was during the Reagan administration and the corporate tax during the Trump administration.

 Table 5 shows the number of employees in the different sectors of the economy using monthly data.

Table 6 gives the percentage increase in the number of employees in each category by administration

and Table 7 gives the ranking of that growth by the seven different measures. These data are also only available after WWII.

 The five top administrations in rank of growth in the total private employment are Democratic administrations. And with the exception of the Obama administration, the rest of the 14 ranked in this list are Republicans.

 There were 18.4 million manufacturing workers at the end of the Carter administration of the 1980s, the largest total in the country’s history. This number declined for the next 50 years and was 12.3 million when Trump took office. Almost 80% of that decline took place from 2001 to 2009, the G.W. Bush term when globalization was in vogue. During the Trump administration there was an increase of about a quarter of a million jobs in manufacturing, though all happened during the recovery from the COVID epidemic.

 Government Employment is a bit paradoxical. The maximum number of Federal Government employees was 3.1 million at the end of the Reagan administration For the rest of the 20th century it dropped with the largest decrease of a quarter million workers during the Clinton Administration. Since then it has increased back to the 3 million level with the largest increase during the Trump years before Covid. At the same time there has been an 18.7 % increase in the population.

 State and Local Government employment saw steady increases from the time of Truman to the end of the 20th century. For this century, the employment of these governments has stayed about the same while serving an increase population of 53 million.

 The unemployment rate is not ranked in this essay because the observations have considerable “noise” in them; the official definition of unemployment has changed many times over. Further, the participation rate, the number of discouraged workers, layoffs or those on strike all can impact this rate. Employment levels are better measures of the economy’s health.

 Table 8 presents the total federal debt at the end of each president’s term in $ billions from 1900, and the debt held by the public from 1944 to the present.¹² The last column presents its annualized growth during their years in office. The debt goes up when the government increases its spending or has a reduction in revenue. The latter happens in recessions when tax revenue falls with the fall in incomes, or when tax rates have been decreased. Spending is determined by Congress in its annual budget process.

 It is not surprising that the largest increases were during the terms of Wilson and FDR who were financing the two World Wars. Between the wars, the attitude was to reduce the debt by running surpluses to pay off the war borrowing. After WWII, the same attitude prevailed and in January 1956, Eisenhower was to say "In this connection, I should mention our enormous national debt. We must begin to make some payments on it if we are to avoid passing on to our children an impossible burden of debt."¹³ For the next two administrations the growth was back to the peacetime levels. After that the growth rate went up, however, when Carter left office it was at the low rate of 31% of GDP, the lowest level since the Coolidge administration.¹⁴ It is now 122%.

 Eisenhower was opposed to any tax cuts until the budget was balanced. Kennedy proposed a tax cut that Johnson was able to get passed, and the economy was growing so fast (as we saw in Table 1) that “it paid for itself.”¹⁵ Ever since tax cuts have been promised that they will pay for themselves and it has not happened. Reagan, G. W. Bush and Trump are known for important tax cuts and corresponding increases in the growth of the debt.

 The largest post-war deficit increase was during the Reagan administration.¹⁶ The exception for the rest of the years of our study was during the Clinton administration where there were budget surpluses and the annualized growth rate of the share of the debt held by the public dropped from 21.5% to less than 1%. Eisenhower would have been pleased with what Clinton accomplished. For the entire twenty-first century, the U.S. Federal debt has been growing at over an average of 8% a year. Of the ten administrations that the deficit increased the most, four were Democrats including the two World War presidents while six were Republicans.

 Tables 9 and10 show how the performance of the stock market during the Presidential terms since 1900.

 Households are the owners of the stocks in the economy and in the 123 years we are studying, the S&P index of the value of this wealth has increased at an annualized rate of 5.5%. The MeasuringWorth saving comparator shows that a dollar invested in 1900 and held for the entire time with all dividends reinvested today would be worth $83,000.

The stock market is an important part of household wealth.  The performance of the market during a president’s term is often used as a measure of economic performance. When the market goes up, people’s wealth goes up and they are happier regardless of whether or not the president’s action were responsible.

 If a new President is regarded as good for the stock market, we would expect that this will be reflected by faster increases in the indexes than a President who is regarded as a danger to the market. This impact can start the day they are elected or the day they are inaugurated. As expectations change the market will change. Between the day Herbert Hoover was elected and the day he took office, the DJIA had increased 20.4%. Investors were pleased with their new president. On the last day Hoover was in office, with the economy deep in depression, the DJIA stood at 20% of its value compared to four years earlier on his election day. Many people make comparisons of the four years between the days after the election and others choose the four years between inaugurations, so both are presented here. One argument is that investors are thinking about who will be president, while the other is that they only think of who is president.

 In 2008 between the day Obama was elected and the day he was inaugurated the economy was in the downturn of a recession and the DJIA average fell 13%. The market would be falling regardless of who was the president. His next term it went up 6.0% during that same period.

 During their terms all presidents have had a day where the market was highest. During the two terms of Reagan, the highest value was 173% higher than the highest in Carter's term. The highest value in the Clinton administration was 243% higher than the highest during the Reagan term.

 While the growth in financial holdings such as 401c3 and IRAs are important to the improvement of a household's well being, the changes in the value of their home is much more important.

 Tables 11 and 12 show the value of housing during the 22 Presidential terms since 1900, using the Case-Shiller Home Price Index (HPI) as the measure. Today there are close to 150 million homes in the US, and they are owned by 65% of households. Around 5 million of them are sold each year. At least since WWII, the ratio of the value of average house to the annual median personal income has been around five. For example, today the median price of existing homes is $387,000 and the median household income is around $70,000. A one percent increase in the home value of the owner of a median price home today represents close to a $4,000 increase in wealth, or about 5% of their income.

 To most of these households their home is their most important asset and often what the owners plan to sell to retire. There is little Presidents do that directly impacts housing prices, however when discussing how much better or worse off people are after each president’s term, the value of their most important asset should be considered. While there are considerable concerns in today’s discussions about the high cost of housing, millions of home owners are not complaining about how their wealth has increased.

Over the long run the main driving force of the value of housing is prices. For the 123 years we are studying, the correlation between the HPI and the GDP deflator is .96, however, there are exceptions to the close relationship:

 1 Between 1945 and 1947 the HPI increased 50% as the deflator went up 25%.

2 During the Carter administration the HPI increased 63% as the deflator went up 34%.

3 From 2006 to 2011, the HPI fell 24% while the deflator dropped only 9%.

4 During the Obama administration the HPI increased 27.8%, or an increase in average household wealth of $107,500. 

5 During the Trump administration the HPI increased 26.2%, or an increase in average household wealth of $101,500..

6 For Biden’s term up to July 2024, the HPI has increased 39.7 % or $153,600 times today’s mean home value. This shows that since Biden was elected, 65% of US households have seen the value of their wealth increase equal to two years of their annual income.

 In contrast to prices and wages, most households do not have a clear idea of the value of their home though the process of refinancing that requires an appraisal and sites such as Zillow have changed that a bit.

 This may explain that in reading the many discussions of which president was best for the economy (as we see today) there is much talk about the costs of commodities, often compared to incomes, but no discussion of the changes in the largest component of household wealth, the home.¹⁷

 Tables 13 and 14 present the values of “inflation” during the terms of the presidents. In contrast with the other measures we have discussed, rising prices do not have a clear cost or benefit.¹⁸ In aggregate, if someone pays more for an item, someone else receives more income. Consumers see costs go up, but businesses see revenue go up and households see their incomes, portfolios and homes go up as we have shown above.

 While there are many who blame or credit particular presidents for certain inflation “spells”, with few exceptions, most economists say their actions have little to no effect on the rate of price changes during their terms. The consensus is that the control of the money supply and the setting of short-term interest rates by the FED are the important tools.¹⁹

 The important question, however, is how important is the inflation rate to the health of the economy? As described above, the real per capita GDP tells us how much goods and services are available per person. It is the measure we use to determine the health of the economy. Prices in themselves will not matter if the economy is growing. Since 1900 the CPI increased at an average rate of 3% and the Real GDP per capita at 1.87%.²⁰ If the economy is growing slower when there is higher inflation, that would be a real effect. If we determined that certain presidents were responsible for that higher inflation, then we would say that is important when ranking their overall performance.

 This hypothesis fails. The correlation of the 22 observations of the increase in these two variables as shown in table 1 is less than 0.1. That is a result of NO CORRELATION. For example, during the term of Jimmy Carter there was the highest level of inflation after Inauguration, and yet he ranked 10th out of 22 in growth of real GDP per capita. In contrast, Calvin Coolidge had zero to slightly negative inflation during his term and ranked 12th in growth of real GDP.²¹

Conclusion

 We started this essay by pointing out that the performance of the economy during a president’s term, good or bad, is the result of events that occurred both before and during his term of office and that were often beyond his control.²²

 This can make it difficult to determine how much to credit or blame the president for what occurred. But it is done all the time, particularly during election times, so we hope these data provide a more accurate way to make such evaluations.

 The best measure of the aggregate health of an economy is the growth in per capita GDP. Growth has been better under some presidents than others. Table 2 shows that growth has been better a little more often under Democratic Presidents. Using the data in Tables 1 and 13, we have demonstrated that historically for 120 years, inflation has not been a determinant of this real growth.

 In table 3 we discuss the fact that as government expenditures are part of output and by removing that part of GDP give us a ranking of the growth in the private sector. In this century private growth is slower under Bush II and Trump and higher during the Obama and Biden administration.

 table 4 shows that tax rates were decreased almost equally by both parties, though the size of the drop under Reagan was substantially more than the rest. Of the nine increases, three were Republicans, Bush I, Hoover and Harding/Coolidge. For most of the period interest rates have been determined by the FED and it is a tradition that their actions are independent of the President.²³

 It is likely that most economists might think that it would be more insightful to use economic performance to rate the chairs of the Federal Reserve Board.

 Tables 5, 6 and 7 show the trends in employment by sectors. During the Carter administration the number employed manufacturing peaked at 18.5 million while private services was 49.9 million. Since then, manufacturing employment has fallen 31% and services increased 124%.

 In our discussion of deficits with table 8 it is clear that concern for the size of our debt is “not what it used to be.” Bush I could well have lost his chance to be reelected because he raised taxes to reduce the deficit. We do not see anyone suggesting that this century.

 The stock market is driven by expectations. Table 9 and 10 tell you how those changed over the 120 years. It is interesting that for some the impact is when they are elected and others when they are inaugurated.

 Table 11 and 12 present the story of the growth in the value of the most important asset of 65 percent of American households, their home. Home prices are affected by prices of other commodities and represent the cost of owning one to the other 35%. We show that there have been significant variations in relevant home prices and in discussions of what happened in a president’s term, these changes should be discussed.

 Finally, Table 13 and 14 discuss inflation. This seems to be the number one concern of voters today and why the FED does what it does. We will not get into those issues. The result we show here is that over the 123-year period of our data, there is no correlation between inflation and the growth of real GDP per capita.

 As was said at the start of this essay, the performance of the economy during a president’s term, good or bad, is the result of events that occurred both before and during his term of office and that were mostly beyond his control. This can make it difficult to determine how much to credit or blame the president for what occurred. But it is done all the time, particularly during election times, so we hope these data provide a more accurate way to make such evaluations. It is likely that most economists might think that it would be more insightful to use economic performance to rate the chairs of the Federal Reserve Board.

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*The revisions of this essay has benefited from the research and editing of Ben Hogewood.

¹ To measure GDP takes hundreds of national income accountants working year-round. There are three versions presented during the year.
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² Another aggregate price index is the GDP Deflator. This is an index used to measure the changes in the value of GDP due to price changes.
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³ We do not separate the first term of Theodore Roosevelt when he took over after the death of William McKinley.
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⁴ We could have used the year after he was elected to the year his successor takes over. The theory in doing it that way is that it takes a year for a president’s policies to have an impact. Table 3a versus 3b does this comparison and we did construct many of the tables with annual data that way and while it did change some rankings, it was not significant. If you want a copy of those.
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⁵ From 1952 to the present, that is the month of the inauguration. Before that, the date was March 3rd.
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⁶ These total outputs do not include transfer payments such as the payments in the stimulus package.
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⁷ From 1932 to 1968, gold was held by central banks and Americans were not allowed to own it.
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⁸ Truman took over (less than three months after Roosevelt died into his fourth term.)
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⁹ Transfer payments such as Social Security, Medicare and unemployment benefits are not payments for production and are not part of GDP.
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¹⁰ The Trump administration has had a measurable increase in the defense budget as well.
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¹¹ In this table we do not separate the two administrations where a vice president from the same party took over.
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¹² This is the debt excluding what is held by other government agencies such as the Social Security Trust fund and the amount held by the Federal Reserve System.
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¹³ On that day, the per capita debt was $1,600, today it is over $200,000.
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¹⁴ Remember that these data are in nominal terms, so the inflation of this period has an impact on this ratio.
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¹⁵ A lower tax rate times a larger income can generate more or less revenue. For the Kennedy/Johnson administration, revenues went up. It was a relatively small cut and the Federal expenditures we also cut.
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¹⁶ There was a recession and a large tax cut during the eight years of his administration that caused the rapid increase in the debt.
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¹⁷ The most fundamental function in macroeconomics is the consumption function that was introduced by John Maynard Keynes in the 1930s and states there is a stable relationship between consumption and income at a proportion called the marginal propensity to consume (å) C =åY. In the 1960s several economists felt that a better consumption would also take into account the impact of wealth so the function would look like this. C =åY + ßW
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¹⁸ The fact that the Federal Reserve Board (FED) has kept short term interest rates so high to reduce inflation is not to be ignored but not exactly germane to the discussion here.
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¹⁹ In 1900, the money supply was based on gold reserves and William Jennings Bryant was giving speeches on its evil. Since that point we have had evolving ways, our money was “created” The central bank we call the Federal Reserve was created in 1913. The Depression created new ways banks were regulated and in 1971 we finally stopped the convertibility of the dollars into gold for its last purpose, international currency exchanges. We now have a central banking system with a board of Governors appointed by the president.
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²⁰ This is more than the FED’s current goal of 2%.
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²¹ Economists say this phenomenon is that prices are homogeneous of degree zero in all prices.
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²² No one would say that a pandemic that has had large effects on the economy was the cause of a president’s actions, but COVID had a measurable impact on the economy during both the Trump’s and Biden’s administrations.
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²³ Economists say this phenomenon is that prices are homogeneous of degree zero in all prices.
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