Sentiments about the United States economy under the tenure of Joe Biden from January 2021 to January 2025 are often divided between two main concerns. There is a sizeable number of people who were dissatisfied with his administration because of the persistence of record-high inflation. This was reflected in his low approval ratings and the results of the 2024 elections in which his vice president Kamala Harris lost to Donald Trump. However, on the flip side, there are several groups, which include economists and researchers, who credit the Biden administration for its outstanding economic accomplishments. Some observers have even noted that Trump has inherited a historically strong American economy from Biden.
The United States Economy Under Joe Biden: Important Economic Accomplishments of the Biden Administration
Strong and Stable Post-Pandemic Economic Growth
The coronavirus pandemic brought economies around the world to their knees. The U.S. economy contracted by 3.5 percent in 2020. This is the largest annual decline since 1946. Note that the real gross domestic product in the second quarter of 2020 specifically contracted by 8.9 percent. This is the largest single-quarter drop in 70 years. This decline was due to widespread lockdowns that interrupted business activities, reduced consumer spending, and interrupted domestic and global supply chains. However, beginning in 2021, the American economy staged a strong GDP recovery. Take note of the following:
• Strong Rebound in 2021: The U.S. real GDP grew by 5.9 percent by the end of 2021. This was considered the fastest annual growth rate since 1984. Of course, given the contraction of real GDP in the previous year, this was expected. The reopening of the economy and fiscal stimulus measures helped drive this growth.
• Moderate Growth in 2022: A 2.5 percent increase in real GDP was recorded for 2022. This is a moderate growth rate. Some might describe this as a decelerated growth trend. This slowdown is still reasonable. The trend reflected how the U.S. economy was adapting to post-pandemic conditions and tamed down fiscal stimulus.
• Stable Growth in 2023: The U.S. real GDP maintained its upward trajectory with a 2.9 percent growth rate by the end of 2023. Nevertheless, while still considered moderate, this higher growth compared to the previous year signaled an acceleration. The increase was primarily driven by consumer spending and business investments.
• Further Expansion in 2024: Growth was upward and generally stable in 2024. Real GDP in the third quarter of 2024 was at an annual rate of 3.1 percent. This marked a sustained upward direction. The growth was attributed to increases in consumer spending, exports, business investment, and federal government spending.
The post-pandemic recovery of the U.S. was comparable to other major economies like the European Union and China. The cumulative growth of the E.U. from Q4 2019 to Q4 2023 was even less than the U.S. Factors like the energy shock from the escalation of the Russian-Ukraine Conflict and record-high inflation impacted its economic recovery. The economic policies and specific legislative agenda of the Biden administration played a central role in stimulating economic recovery. These include the American Rescue Plan of 2021 which stimulated growth through an expansionary fiscal policy that resulted in job creation and higher consumer and public spending.
Job Creation and Individual Economic Security
Part of the economic accomplishments of the Biden administration is its positive impact on job creation and unemployment reduction. Specific legislative achievements help in producing more economic opportunities. The American Rescue Plan Act supported businesses and stabilized the job creation rate during the pandemic recovery period. The Infrastructure Investment and Jobs Act, the Inflation Reduction Act, and The CHIPS and Science Act helped bolster job creation further in the construction, clean energy, and semiconductor manufacturing sectors. Below are the specific job creation and unemployment reduction milestones of the Biden administration:
• Millions of Jobs Created: The U.S. economy under Joe Biden regained all lost jobs due to the coronavirus pandemic and added millions more. The administration saw the creation of about 16.6 million jobs. This marked a historic period of employment growth and also contributed to the lowest average unemployment rate in 50 years.
• Unemployment Reduction: Official data showed that the unemployment rate declined from 6.3 percent in January 2021 to 3.9 in December 2021. The rate continued to decrease at 3.5 percent in June 2022 and 3.6 percent throughout 2023. There was a slight uptick at 4.2 percent in November 2024 but settled down to 4.1 percent in December.
• Household Wealth Growth: After-tax incomes increased by USD 4,000 per person. This figure accounted for inflation. Real wages grew most quickly for low-wage workers. This period marked the strongest recovery for real wage growth in 50 years. Moreover, median household wealth, adjusted for inflation, rose by a record 37 percent.
• Reduction in Child Poverty: Specific policies like the expanded Child Tax Credit under the American Rescue Plan Act and modernized nutrition benefits helped in reducing child poverty. The Biden administration witnessed about 1 million American children lifted out of poverty. This provided American families with greater economic security.
• Health Insurance Coverage: The American Rescue Plan Act also included a provision for expanding the eligibility for Affordable Care Act to improve access to health coverage. Rates of uninsurance reached historic lows starting in the first quarter of 2022. Marketplace enrollment also reached a record high at 21.4 million enrollees in 2024.
Special Pointers on the Economic Highs and Lows
One of the reasons the U.S. economy grew and recovered from the pandemic downturn was due to the aggressive expansionary fiscal policy of the Biden administration. The U.S. government spent hundreds of billions of dollars to stimulate the economy. However, despite pushing the U.S. economy toward quicker recovery, it has a downside. The government spending worsened the impact of the 2021-2023 Global Inflation Surge because it resulted in the infusion of more money into the economy amidst issues with supply due to the 2021-2023 Global Supply Chain Crisis.
The Biden administration still succeeded in controlling inflation. 2024 ended with inflation down to nearly 2 percent. This accomplishment was a result of the contractionary monetary policy of the U.S. Federal Reserve. Prices were controlled by increasing interest rates to reduce demand and spending. Of course, as the central bank of the United States, the Feds acted independently from the Biden administration. Joe Biden can still be credited for respecting and trusting the autonomy of the Federal Reserve while his administration focused on long-term solutions to ensure continued economic growth and that inflation will be kept under control in the future.
Another driver of the economic growth under the Biden administration was the strong consumer spending. This was specifically pushed by the creation of jobs and pro-labor policies that resulted in significant wage gains. Household incomes grew faster than inflation under the presidency of Joe Biden. However, despite this, household debt also grew. The number of defaults on credit cards and car loans has been increasing. Some possible causes of this trend include the depletion of personal savings during the pandemic and the rising cost of living due to inflation.
Several economic issues were left unsolved by the Biden administration. One of these is the persistent U.S. Debt Crisis. The risk of default is low. There are suggestions to raise or remove the U.S. Debt Ceiling to give the U.S. government more freedom to borrow. Trump has expressed his intention to remove this borrowing limit. There is also the problem with the U.S. trade deficit. The Biden administration saw an expansion of the deficit to USD 858.25 billion in 2021 and further to USD 971.12 billion in 2022 due to robust domestic demand and growth of U.S. imports. Trump is planning to resolve this through tariffs.
FURTHER READINGS AND REFERENCES
- The White House. 2025. The Bidden-Harris Administration Record. The White House and the United States Government. Available online
- United States Bureau of Economic Analysis. n.d. “Gross Domestic Product.” BEA Data. Bureau of Economic Analysis. Available online
- United States Bureau of Economic Analysis. n.d. “Income and Saving.” BEA Data. Bureau of Economic Analysis. Available online
- United States Bureau of Economic Analysis. n.d. “International Trade and Investment.” BEA Data. Bureau of Economic Analysis. Available online
- United States Bureau of Labor and Statistics. 2025. The Employment Situation – December 2024. Bureau of Labor and Statistics. Available online