Why do many Americans miss the Trump-era economy?

The US economy under President Biden is considered strong, but inflation makes many people feel life is not as comfortable as before.

In 2018, Jonathan and Trista Schmier felt the economy was good enough to take a risk. They quit their real estate management jobs and opened a restaurant called Rustic Burger in Fayetteville, North Carolina.

Trista Schmier had long wanted to own a restaurant. He designed a menu with 20 burgers. The couple had no trouble hiring staff, with wages starting at $9 an hour. Food prices were also reasonable, allowing them to keep the burger, fries, and drink combo at $9.99.

A year later, they opened another branch. In 2020, when they were planning to open a third location, Covid-19 hit. Two years later, they had to close all their restaurants and go back to their old jobs. The Schmiers had trouble finding reliable staff and couldn’t afford to pay $14 an hour to compete with other restaurants. Food prices also skyrocketed. Chicken wings and burger patties cost twice as much, while the beef used in burger patties cost 1.5 times as much.

“We can’t keep raising prices. Customers are getting frustrated,” said Jonathan Schmier, who said customers protested when he raised the price of his burger combo to $10.99.

Jonathan and Trista Schmier at Rustic Burger restaurant. Photo: USA Today

The Schmier family is among millions of Americans who say the economy is stronger under former President Donald Trump . So they want him to win again so they can enjoy prosperity again.

A late June CNN poll found that 51% of voters said they trusted Trump to handle the economy better than President Joe Biden, compared to 32%. Another poll a few days ago by the Pew Research Center found that 54% of respondents believed Trump would do better for the economy than Biden, compared to 40%.

Carroll Doherty, director of political research at Pew, said Americans now feel about the economy much the same way they did in the first months of the coronavirus pandemic. In April 2020, just 23% of Americans said the economy was in “good” or “excellent” shape. At that time, much of the country was under lockdown and millions were unemployed.

Before the pandemic, the economy under Trump was quite strong. In fact, when he took office in 2017, he inherited an economy that was already strong. The job market is now on a record-long streak of growth. In the three years (January 2017-February 2020), the US added an average of 181,000 new jobs per month. The unemployment rate is at a 50-year low of 3.5%. Black unemployment is also at a record low of 5.3%. However, this rate under Biden is even lower, around 4.8% in early 2023.

Median household income in the United States rose the most in more than four decades, to a record $68,700 in 2019, according to the U.S. Census Bureau. The poverty rate also fell to 10.5%, a 60-year low. Under Trump, the stock market also recorded its longest winning streak in history. However, Wall Street had been accelerating since former President Barack Obama took office for a second term.

In many ways, the economy under Biden is strong. The US president took office while the pandemic was still raging. However, support policies have helped the country boom in consumption during and after the pandemic. Consumption has been the driving force behind the world's largest economy for the past few years, even though inflation and interest rates are at their highest levels in decades. The reason is that people have accumulated large sums of money during the pandemic.

The labor market has also improved significantly over the past two years, surpassing the early stages of Trump's term. The unemployment rate has also remained below 4% for 27 consecutive months. The employment rate for women hit an all-time high in May. But for many people, especially those who are not unemployed, the economy is about more than just jobs. "Inflation is also a big concern," Bernard Yaros, an economist at Oxford Economics, told CNN.

US inflation during Trump's (red) and Biden's (blue) terms. Chart: Reuters

Prices in the US have been soaring due to the pandemic and government support policies. Compared to the peak of 9.1% in mid-2022, prices have cooled significantly. The consumer price index (CPI) is currently at 3% - a 3-year low. However, this is still not comfortable for American households.

Compared to February 2020, the country's CPI is 20% higher. This is eroding the income of many Americans, in contrast to the early years of Trump's term. Before that, inflation was stable at below 3% (2016-2020).

During Trump’s four years in office, wage growth was also the highest in 40 years. However, analysts point out that the reason is that 21 million Americans lost their jobs during this period, mainly in low-wage industries. Therefore, when calculating, the average wage increased.

"People don't look at price changes, they just know that the price of a carton of eggs is higher now than two years ago. I think this is what puts Biden at a disadvantage, from an economic management perspective," Yaros said on CNN .

In a study earlier this year, Yaros also found that inflation is weighing on the minds of undecided voters. His team found that if these voters care about how much prices have increased since Biden took office, Trump could win. Conversely, Biden could win if they care about how inflation has changed over the years and what their income is after adjusting for inflation.

Ted Southworth (Burlington, North Carolina) considers his personal finances "quite comfortable." However, inflation still has a big impact on his and his wife's lives. They eat steaks at home less often and eat out less often. They still drive their old car instead of buying a new one. Southworth used to work as a purchasing manager at a truck assembly company and retired 15 years ago. "I trust Trump more. During Trump's term, inflation was very low. I don't think the US has controlled inflation," he said. He also voted for Trump in 2016 and 2020.

Becky Cantrell of Land O' Lakes, Florida, has also noticed steep price increases every time she shops. She recently decided to skip mayonnaise because the price has increased 37% since a few years ago, to $7.88 a bottle. Dollar Tree is ending its $1 flat rate after 35 years and raising prices on most products to $1.25 by the end of 2021.

Cantrell had trouble finding a job that paid her enough to live on, so she had to work two jobs. She found a better-paying job in early March. But Cantrell still plans to vote for Trump in November. “Everything was cheaper before Biden became president,” she said.