United States President Joe Biden and former US President Donald Trump’s first debate of the 2024 campaign has refocused attention on their respective economic records in office.
During Thursday’s head-to-head, the candidates clashed on the economy, with Biden taking credit for overseeing the recovery from the COVID-19 pandemic and Trump claiming to have presided over “the greatest economy in the history of our country”.
Both Biden and Trump could point to strong performances in particular areas of the economy, but opinion polls have consistently shown that voters have more trust in the Republican’s ability to handle economic and cost-of-living issues.
In an ABC News/Ipsos poll released last month, 46 percent of respondents said they trusted Trump on the economy, compared with 32 percent for Biden.
On inflation, Trump was favoured over the Democrat by 44 to 30 percent.
Polls also show that Americans overwhelmingly view the economy as their top priority, meaning that Biden’s re-election hopes are likely to live or die depending on his ability to sell a positive economic message.
Here are Trump and Biden’s economic records compared in four key areas.
Economic growth
Both the Biden and Trump administrations oversaw periods of robust growth.
Since Biden’s inauguration, gross domestic product (GDP) has increased by 8.4 percent when adjusted for inflation.
Under Trump, GDP grew 6.8 percent – but that includes the plunge in economic activity that occurred during the first year of the pandemic.
Excluding 2020, Biden comes out slightly ahead, with an annualised growth rate of about 2.9 percent, compared with just under 2.7 percent for Trump.
Inflation
Biden’s tenure has been marked by far higher inflation compared with Trump’s – although many of the factors driving high prices, such as COVID-related supply chain disruptions, were out of his control.
Since Biden came to office, prices have risen more than 19 percent.
The average price of a gallon (3.8 litres) of petrol rose from $2.33 to $3.76 between January 2021 and May of this year, according to the US Bureau of Labor Statistics.
The cost of a loaf of bread increased from $1.55 to $1.97, while the price of a dozen eggs jumped from $1.47 to $2.70
At a similar point in Trump’s presidency, prices had only risen about 5 percent.
While inflation has come down sharply since peaking at 9.1 percent in mid-2022, it remains stubbornly high.
The consumer price index last month stood at 3.3 percent, well above the US Federal Reserve’s target of about 2 percent.
Jobs
Biden and Trump can both claim to have presided over strong labour markets.
Unemployment fell to a 53-year low of 3.4 percent in January last year and has stayed below 4 percent for all but one month since then.
Excluding 2020, Trump also oversaw a period of low unemployment, with the jobless rate hitting a low of 3.5 percent in late 2019.
Under Biden, the economy has added about 15.7 million jobs.
By contrast, Trump left office with some three million fewer jobs – although that figure was skewed by the pandemic.
However, even before the pandemic, job creation grew at a slower pace during Trump’s administration than it has under Biden.
Wages
While Biden and Trump both presided over solid wage growth on paper, US workers have seen their earnings decline in real terms under Biden due to inflation.
Under Trump, wage growth stayed above inflation, delivering modest rises in workers’ incomes.
From March 2021, consumer prices began to diverge from earnings, before the trend started to reverse in early 2023.
The upshot is that real median weekly wages fell by 2.14 percent between the start of Biden’s term and the first quarter of 2024, according to a FactCheck.org analysis citing US Bureau of Labor Statistics data.
The positive news for US workers is that wages have started growing again.
In May, real wages rose 0.5 percent compared with the previous year, although they have yet to recover to their levels at the start of Biden’s tenure.
“While real wage growth has turned slightly positive in recent months, the level of real wages is still below where they were at the onset of the inflation surge that we began to see in the first quarter of 2021,” the Federal Reserve Bank of Atlanta said in an analysis on Thursday.
“Simply put, real wages haven’t fully caught up to the sudden burst in inflation.”
OTTAWA – Finance Minister Chrystia Freeland says the government is making some changes to mortgage rules to help more Canadians to purchase their first home.
She says the changes will come into force in December and better reflect the housing market.
The price cap for insured mortgages will be boosted for the first time since 2012, moving to $1.5 million from $1 million, to allow more people to qualify for a mortgage with less than a 20 per cent down payment.
The government will also expand its 30-year mortgage amortization to include first-time homebuyers buying any type of home, as well as anybody buying a newly built home.
On Aug. 1 eligibility for the 30-year amortization was changed to include first-time buyers purchasing a newly-built home.
Justice Minister Arif Virani is also releasing drafts for a bill of rights for renters as well as one for homebuyers, both of which the government promised five months ago.
Virani says the government intends to work with provinces to prevent practices like renovictions, where landowners evict tenants and make minimal renovations and then seek higher rents.
The government touts today’s announced measures as the “boldest mortgage reforms in decades,” and it comes after a year of criticism over high housing costs.
The Liberals have been slumping in the polls for months, including among younger adults who say not being able to afford a house is one of their key concerns.
This report by The Canadian Press was first published Sept. 16, 2024.
OTTAWA – Statistics Canada says manufacturing sales rose 1.4 per cent to $71 billion in July, helped by higher sales in the petroleum and coal and chemical product subsectors.
The increase followed a 1.7 per cent decrease in June.
The agency says sales in the petroleum and coal product subsector gained 6.7 per cent to total $8.6 billion in July as most refineries sold more, helped by higher prices and demand.
Chemical product sales rose 5.3 per cent to $5.6 billion in July, boosted by increased sales of pharmaceutical and medicine products.
Sales of wood products fell 4.8 per cent for the month to $2.9 billion, the lowest level since May 2023.
In constant dollar terms, overall manufacturing sales rose 0.9 per cent in July.
This report by The Canadian Press was first published Sept. 16, 2024.
TORONTO – Strength in the base metal and technology sectors helped Canada’s main stock index gain almost 100 points on Friday, while U.S. stock markets climbed to their best week of the year.
“It’s been almost a complete opposite or retracement of what we saw last week,” said Philip Petursson, chief investment strategist at IG Wealth Management.
In New York, the Dow Jones industrial average was up 297.01 points at 41,393.78. The S&P 500 index was up 30.26 points at 5,626.02, while the Nasdaq composite was up 114.30 points at 17,683.98.
The S&P/TSX composite index closed up 93.51 points at 23,568.65.
While last week saw a “healthy” pullback on weaker economic data, this week investors appeared to be buying the dip and hoping the central bank “comes to the rescue,” said Petursson.
Next week, the U.S. Federal Reserve is widely expected to cut its key interest rate for the first time in several years after it significantly hiked it to fight inflation.
But the magnitude of that first cut has been the subject of debate, and the market appears split on whether the cut will be a quarter of a percentage point or a larger half-point reduction.
Petursson thinks it’s clear the smaller cut is coming. Economic data recently hasn’t been great, but it hasn’t been that bad either, he said — and inflation may have come down significantly, but it’s not defeated just yet.
“I think they’re going to be very steady,” he said, with one small cut at each of their three decisions scheduled for the rest of 2024, and more into 2025.
“I don’t think there’s a sense of urgency on the part of the Fed that they have to do something immediately.
A larger cut could also send the wrong message to the markets, added Petursson: that the Fed made a mistake in waiting this long to cut, or that it’s seeing concerning signs in the economy.
It would also be “counter to what they’ve signaled,” he said.
More important than the cut — other than the new tone it sets — will be what Fed chair Jerome Powell has to say, according to Petursson.
“That’s going to be more important than the size of the cut itself,” he said.
In Canada, where the central bank has already cut three times, Petursson expects two more before the year is through.
“Here, the labour situation is worse than what we see in the United States,” he said.
The Canadian dollar traded for 73.61 cents US compared with 73.58 cents US on Thursday.
The October crude oil contract was down 32 cents at US$68.65 per barrel and the October natural gas contract was down five cents at US$2.31 per mmBTU.
The December gold contract was up US$30.10 at US$2,610.70 an ounce and the December copper contract was up four cents US$4.24 a pound.
— With files from The Associated Press
This report by The Canadian Press was first published Sept. 13, 2024.
