From Truman to Biden: A Comparative Look at Presidential Economic Success Through Unemployment Rates

Average Unemployment Rate by President

The plot provides a glimpse into the economic impact of various U.S. Presidents through the lens of average unemployment rates. It highlights the Presidents with the lowest average unemployment rates since 1948. Examining the economic climate, monetary systems, and policies during these terms allows us to understand the factors contributing to low unemployment, and how each President’s approach shaped economic outcomes.

Joe Biden (2021-Present): Navigating Post-Pandemic Recovery

Joe Biden ranks first with the lowest average unemployment rate of 4.11%. Biden’s term began amidst the COVID-19 pandemic, a period of significant economic instability. His administration’s economic strategy involved massive fiscal stimulus packages to support households, businesses, and state governments. The American Rescue Plan Act injected liquidity into the economy to stabilize it and spur recovery. However, the rapid drop in unemployment largely represented a V-shaped recovery, where existing jobs came back online rather than new jobs being created (source: CNBC, Reuters).

The Biden era is marked by the use of fiat currency, with no direct tie to gold, which allows for more flexibility in monetary policy to address economic challenges, such as providing stimulus during the pandemic. The expansionary fiscal and monetary policies led to a quick rebound in employment, but also contributed to inflationary pressures. Despite inflation, the labor market remained robust, with unemployment rates reaching historic lows.

Lyndon B. Johnson (1963-1969): The Great Society and Economic Expansion

Lyndon B. Johnson ranks second with an average unemployment rate of 4.18%. He presided over one of the most economically prosperous periods in U.S. history. His “Great Society” programs aimed to eliminate poverty and racial injustice, while also expanding healthcare and education. The combination of government spending on social programs and the Vietnam War led to economic expansion, which kept unemployment low.

During Johnson’s presidency, the U.S. was still on the Bretton Woods system, which pegged the dollar to gold. This monetary stability, coupled with expansive fiscal policies, helped create a strong labor market. However, increased government spending eventually sowed the seeds for inflationary pressures that would come to a head in the 1970s, leading to significant policy shifts under subsequent administrations to combat rising inflation.

Harry S. Truman (1945-1953): Post-War Stability

Harry S. Truman ranks third with an average unemployment rate of 4.24%. Truman’s presidency came at a pivotal moment in American history: the transition from a wartime economy to peacetime stability after World War II. Truman’s economic policies aimed to avoid the economic downturn that many feared would follow the end of the war. His administration implemented measures like price controls, wage stabilization, and reconversion programs to manage the post-war economy effectively. His administration pushed for the GI Bill, which helped returning soldiers reintegrate into the economy, provided education and housing support, and fueled consumer spending.

The economy during Truman’s time was still operating under the gold standard, providing monetary stability and helping keep inflation under control. Truman faced challenges like inflationary pressures following the war, but he managed to navigate them through wage and price controls while promoting economic growth.

Dwight D. Eisenhower (1953-1961): Conservative Fiscal Policies

Dwight D. Eisenhower ranks fourth with an average unemployment rate of 5.03%. Eisenhower adopted a conservative approach to fiscal policy, prioritizing balanced budgets over expansive government spending. Despite these conservative policies, the U.S. economy experienced growth, partly driven by the construction of the interstate highway system, which created jobs and boosted commerce.

Eisenhower’s term was marked by monetary stability under the gold standard, which helped maintain low inflation. His focus on infrastructure investment, combined with restrained fiscal spending, helped sustain economic growth without overheating the economy, contributing to a relatively stable labor market.

Richard Nixon (1969-1974): The End of the Gold Standard

Richard Nixon ranks fifth with an average unemployment rate of 5.04%. Nixon’s presidency saw the end of the Bretton Woods system, as he took the U.S. off the gold standard in 1971. This transition to fiat currency allowed for more flexible monetary policy but also introduced new inflationary pressures.

Nixon implemented wage and price controls in an attempt to manage inflation, but these measures had mixed success. While unemployment remained relatively low during parts of his presidency, the economy faced stagflation—a combination of stagnant economic growth and inflation—in the years that followed. Nixon’s economic policies were a turning point, shifting the U.S. fully to a fiat currency system and reshaping the economic landscape for future Presidents.

Donald Trump (2017-2021): Tax Cuts, Deregulation, and Tariffs on China

Donald Trump ranks sixth with an average unemployment rate of 5.96%. Trump’s economic policy focused on tax cuts, deregulation, and trade renegotiation. He also implemented tariffs on Chinese goods, which were aimed at addressing trade imbalances and protecting American industries. These tariffs, while creating uncertainties in certain sectors, were part of a broader effort to renegotiate trade terms. Interestingly, Biden has maintained some of the tariffs imposed during Trump’s administration, highlighting their perceived strategic importance (source: Bloomberg, Wall Street Journal). These policies had significant impacts on sectors like manufacturing and technology, boosting activity and contributing to overall economic growth. The Tax Cuts and Jobs Act of 2017 aimed to boost business investment by lowering corporate tax rates, which, along with deregulation, contributed to economic growth and a decline in unemployment rates.

The Trump era saw low unemployment rates before the onset of the COVID-19 pandemic, as his policies stimulated business activity. However, Trump’s term was characterized by significant trade tensions, especially with China, which created uncertainties in certain sectors. The monetary policy during this time remained expansionary, with low interest rates aimed at supporting economic growth.

Bill Clinton (1993-2001): Economic Prosperity and the Technology Boom

Bill Clinton ranks seventh with an average unemployment rate of 5.17%. Clinton’s presidency was characterized by economic prosperity, marked by fiscal discipline, welfare reform, and the technology boom. The North American Free Trade Agreement (NAFTA) and other trade liberalization policies helped expand markets for American businesses. His administration’s focus on deficit reduction and increased trade contributed to economic growth and a low unemployment rate.

George W. Bush (2001-2009): Economic Challenges and the Great Recession

George W. Bush ranks eighth with an average unemployment rate of 5.31%. Bush’s presidency was marked by significant economic challenges, including the aftermath of the dot-com bubble burst, the 9/11 terrorist attacks, and the onset of the Great Recession. His administration implemented tax cuts and stimulus measures to support the economy, but the financial crisis of 2008 led to rising unemployment rates towards the end of his term.

John F. Kennedy (1961-1963): New Frontier Policies

John F. Kennedy ranks ninth with an average unemployment rate of 5.96%. Kennedy’s “New Frontier” policies focused on stimulating economic growth through tax cuts and investment in space exploration and technology. Although his presidency was short, his efforts laid the groundwork for economic expansion during the 1960s.

George H. W. Bush (1989-1993): Economic Slowdown and Recovery

George H. W. Bush ranks tenth with an average unemployment rate of 6.34%. His presidency faced economic challenges, including a recession in the early 1990s. The Gulf War and increasing budget deficits led to economic instability, which contributed to rising unemployment rates. Despite these challenges, Bush signed the Americans with Disabilities Act and worked towards improving trade relations.

Jimmy Carter (1977-1981): Stagflation and Economic Struggles

Jimmy Carter ranks eleventh with an average unemployment rate of 6.54%. Carter’s presidency was marked by economic struggles, including stagflation—a combination of high inflation and high unemployment. His administration focused on energy policy and deregulation in various industries, but economic challenges persisted, leading to higher unemployment rates.

Barack Obama (2009-2017): Recovery from the Great Recession

Barack Obama ranks twelfth with an average unemployment rate of 7.41%. Obama’s presidency began in the midst of the Great Recession, the worst economic downturn since the Great Depression. His administration implemented stimulus measures, including the American Recovery and Reinvestment Act, to stabilize the economy and promote job growth. Although unemployment was high during the early years of his presidency, the economy gradually recovered, and unemployment rates declined.

Ronald Reagan (1981-1989): Supply-Side Economics and Recovery

Ronald Reagan ranks thirteenth with an average unemployment rate of 7.51%. Reagan’s presidency was characterized by supply-side economic policies, including significant tax cuts, deregulation, and increased defense spending. The early years of his presidency saw a deep recession, but his policies eventually led to economic recovery and job growth, although unemployment remained relatively high during his term.

Gerald Ford (1974-1977): Economic Turmoil and High Unemployment

Gerald Ford ranks fourteenth with the highest average unemployment rate of 7.84%. Ford’s presidency was marked by economic turmoil, including high inflation and unemployment, known as stagflation. His administration faced challenges in managing the economic consequences of the oil crisis and the fallout from the end of the Bretton Woods system. Despite efforts to curb inflation through the “Whip Inflation Now” campaign, economic challenges persisted, leading to high unemployment rates.

Conclusion: A Complex Interplay of Policies and Economic Conditions

The image highlights that low unemployment rates can be achieved under a variety of economic policies, whether through expansive government spending, tax cuts, deregulation, or conservative fiscal management. The context of each President’s term—whether post-war recovery, economic expansion, or navigating a pandemic—played a crucial role in shaping the outcomes.

The transition from the gold standard to a fiat currency system also significantly impacted monetary policy and economic stability. While the gold standard provided monetary stability and helped control inflation, the flexibility of fiat currency allowed for more responsive monetary and fiscal policies, albeit sometimes at the cost of inflation.

Ultimately, the success of each President in maintaining low unemployment was influenced by a combination of sound economic policies, global economic conditions, and the ability to adapt to challenges. This analysis provides valuable insights into how different approaches to economic management have shaped the labor market and contributed to periods of low unemployment throughout modern U.S. history.