Annual GDP Growth: Jimmy Carter v. Trump v. Biden…just for fun

With Carter on his next journey, we look at a major economic fact on GDP growth history as unfashionable as facts may be in DC these days.

Numbers shlumbers, who needs’em?!

• With Jimmy Carter on the next leg of his journey, we give some context with one chart that tends to get missed in the bad memories that came in the stagflationary 1970s.

• The economic challenges faced from 1973 on through the Volcker years and the 1980-1982 double dip recession tend to dominate the histories, but numbers count. The late 1970s delivered a lot of growth and a lot of jobs (see Employment Across the Presidents 8-15-23).

• We break out the annual GDP performance of each year for Carter, Trump, and Biden in their single terms with Trump now having a shot at actually becoming a “3% GDP President” as claimed by his advisors instead of the 2% GDP President he actually was over 3 years ex-COVID and less over 4 years (see The Politics of Objective GDP Numbers: “Flex Facts” on Growth 10-30-24).

• When Tariff Man doubles as Adjective Man, he still religiously avoids the title of Numbers Man since the reality is Trump’s GDP numbers were weak, and Carter had 3 years of GDP growth better than Trump’s best year. That is not the case with Biden’s 2021 numbers, but those are a bit pumped up by the COVID rebound (see GDP 3Q24: Final Number at +3.1% 12-19-24). We get the 4Q24 prelim GDP numbers later this month (Jan 30), but Trump is inheriting a good growth year one way or the other.

There are lot of crucial macro metrics to watch, and inflation and payroll tended to dominate the discussions in 2024. GDP growth is an overriding metric to most “economy watchers” even if they want to forget it from intro econ class.

The above chart measures annual GDP growth for Carter, Trump and Biden and sets them up with the growth numbers for each year.

If you made someone walk over from the poetry department and asked “Pick the greatest economy since the primordial soup” from this chart, which would they pick?

We would guess that the Trump years would get picked last. We did not include the Reagan or Clinton years. That would be mean since those growth rates were so strong, but both Reagan and Clinton were handily reelected for a second term that also generated very strong growth. It is a small point that should be obvious, but we don’t expect the chart to make Fox Business. There are too many specifics in the chart. Trump will say “fake numbers” (hold that thought when the DOGE twins look to shrink the Commerce Dept and the Census resources).

GDP will see a lot more scrutiny in 2025 if inflation can remain tame…

As someone who came of working age during the stagflationary 1970s, I got off the train in NYC for my first job in June 1980 with a 22% Misery Index. That was in the middle of Year 1 of the 1980s decade (Year 4 for Carter) that would see nominal GDP double. That marked the start of two decades of raging bull markets starting with Reagan (see Presidential GDP Dance Off: Reagan vs. Trump 7-27-24) after the Nov 1982 recession bottom. That rolled into the 1990s boom under Clinton (see Presidential GDP Dance Off: Clinton vs. Trump 7-27-24).

Will the focus move from the grocery aisle to growth at some point?

I understand why “Joe Voter” worries more about inflation than the 3 quarterly updates we get on GDP growth numbers every 3 months. Inflation dominated the news for Biden as it did for Carter and Nixon/Ford. But GDP measures total economic activity and drives jobs, investments, tax revenues, and a lot more. The problem is the monthly release (1 final per quarter but 3 releases per quarter) is not fun to look at let alone study the line items and conceptualize.

A casual look at the GDP lines reminds us of what is at stake in the new world of “2% growth” seen in the new millennium (with some exceptions). We tend to think the guy in the White House should be up to thinking about it a bit more and talking about it since a total of over $29 trillion in nominal GDP is not exactly chump change.

If Trump is paying attention to UST debt forecasts and the coming contingent balance sheet legacy cost exposures (Medicare, Medicaid, Social Security, etc.), he will need to sharpen his awareness to the fact that total debt plus legacy liabilities vastly exceeds GDP (see US Debt % GDP: Raiders of the Lost Treasury 5-29-23).

When politicians promise growth on the campaign trail, they might want to have some idea of which lines will grow and how. Most forecasts we have seen show a sequential decline in calendar 2025 vs. 2024. That includes the recent Fed forecasts from the Dec 2024 projections (see Fed Day: Now That’s a Knife 12-18-24). That is food for thought as the structure of Trump’s proposed mega bill gets structured and debated in the coming weeks.

See also:

Footnotes & Flashbacks: State of Yields 1-5-25

Mini Market Lookback: Mixed Start, Deep Breaths 1-5-25

Footnotes & Flashbacks: Credit Markets 2024 1-3-25

Footnotes & Flashbacks: Asset Returns for 2024 1-2-25

HY and IG Returns since 1997 Final Score for 2024 1-2-25

Spread Walk 2024 Final Score 1-2-25

Credit Returns: 2024 Monthly Return Quilt Final Score 1-2-25

Annual and Monthly Asset Return Quilt 2024 Final Score 1-2-25

HY and IG Returns since 1997: Four Bubbles and Too Many Funerals 12-31-24
Footnotes & Flashbacks: State of Yields 12-29-24
Mini Market Lookback: Last American Hero? Who wins? 12-29-24
Spread Walk: Pace vs. Direction 12-28-24
Annual and Monthly Asset Return Quilt 12-27-24
Credit Returns: 2024 Monthly Return Quilt 12-26-24
New Home Sales: Thanksgiving Delivered, What About Christmas? 12-23-24
Mini Market Lookback: Wild Finish to the Trading Year 12-21-24
Trump Tariffs 2025: Hey EU, Guess What? 12-20-24
PCE, Income & Outlays Nov 2024: No Surprise, Little Relief 12-20-24
Existing Home Sales Nov 2024: Mortgage Vice Tightens Again 12-19-24
GDP 3Q24: Final Number at +3.1% 12-19-24
Fed Day: Now That’s a Knife 12-18-24