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Economic Record: President Obama


Name:Barack Obama
Number:44
Party:Democratic
Vice President:Joe Biden
Entered Office:January 20, 2009
Left Office:Incumbent
  Photograph of Barack Obama

The most significant event during President Obama's presidency has, without a doubt, been the Great Recession. When he took office, the country was losing hundreds of thousands of jobs a month, the stock market was in freefall and the GDP was shrinking. Several of the measures below show the country pulling out of this recession during the first 6 to 18 months of his presidency and then performing well above average performance after that point. In many cases, his overall average performance is impacted significantly by the first initial months.

Given that caveat, during President Obama's first term and the portion of his second term that has elapsed thus far, the economy has performed worse than average for GDP growth, job creation, median income and debt. However, the performance of the stock market has been spectacular. It is also important to put the economic performance in global context. During President Obama's presidency, the United States' GDP growth has beat the GDP growth of the other original NATO member countries by the widest margin of any president since World War II.

Major economic events:

Feb. 17, 2009:American Recovery and Reinvestment Act of 2009 signed into law
2009-Present:European debt crisis
Mar. 23, 2010:Patient Protection and Affordable Care Act signed into law
July 21, 2010:Dodd-Frank Wall Street Reform and Consumer Protection Act signed into law
April 8, 2011:Congress comes within one hour of governement shut down
June-Aug. 2011:Debt ceiling crisis of 2011
Aug. 5, 2011:Standard & Poors downgrades the credit rating of the U.S. Treasury
Dec. 2012-Mar. 2013:Negotiations and failure to avoid budget sequester
Jan.-Oct. 2013:Debt ceiling crisis of 2013
Oct. 1-16, 2013:Federal government is shut down
2014:Best year for job growth since 1999

GDP

obama gdp performance

Related: Best Presidents for GDP growth
Source: BEA
Data: Excel

  The green line represents the GDP growth during the presidency of President Obama. The orange line reflects the average rate of GDP growth since 1953.

GDP growth has been below-average during Obama's presidency. That said, it is right about dead on average for years in which we have had divided control of the federal government

Job Creation

obama job creation

Related: Ranking the presidents for job creation
Source: BLS
Data: Excel

  The green line represents the rate of the growth in the number of jobs under President Barack Obama. The orange line reflects the average rate of growth in the number of jobs since 1953.

The economy lost jobs every month of 2009, albeit at a steadily slowing rate. The economy has gained jobs every month after February of 2010. Including 2009, the United States has added an average of 127,824 jobs per month during Obama's presidency, which places him fifth for job creation since FDR. However, excluding 2009, the average would be 191,747 per month, which would rank him second, and from 2011 to the present, we have averaged 207,429 per month, which would place President Obama just behind President Clinton for first place.



Median Income

obama median income

Related: Ranking the presidents for income growth
Source: Census
Data: Excel

  The orange line is the rate at which the median family income has increased on average since 1953 and the green line is how fast it increased under Obama.

The slide in median income that began in 2007 has been much slower to turn around than other economic indicators, such as job creation. It did not really start to recover until 2013, and the data is only available until 2014. However, the improvement from 2013 to 2014 was well above average.



Debt as a Percentage of GDP

obama debt

Related: Change in debt by president
Source: BEA   Treasury
Data: Excel

  This graph examines the way the debt shifted relative to GDP. The orange line shows what the debt would have been if it had started at the same level as it was at when President Obama took office and had grown at the average rate. The green line shows what actually happened.

President Obama has the second-worst record on the debt since 1953. The federal government ran the largest deficit, in absolute terms, it has ever run in 2009: $1.4 trillion. The primary causes of the large deficit were the Great Recession, two simultaneous wars, the Bush tax cuts and the stimulus spending. The stimulus spending is generally seen by economists as having been a net positive for the economy, and it is a large part of the reason that the United States' economy is now dramatically outperforming the economies of other developed countries, as discussed below. By fiscal year 2014, the deficit had been reduced to a manageable $483 billion.



Stock Market

obama stock market

Related: Stock market performance by party of president
Source: Yahoo
Data: Excel

  This graph compares the performance of the S&P500 under President Obama with the average.

The stock market has performed remarkably since President Obama was elected and has almost tripled in value in just six years. The rate at which the stock market has increased in value roughly matches the rate at which it increased during the first six years of Clinton's presidency, but the bursting of the dot com bubble at the end of Clinton's presidency erased any gains after Clinton's sixth year. So, if the value of the stock market continues to increase for President Obama's remaining two years, President Obama will have the best record of any president in modern history.



Compared to Other Developed Countries

obama gdp compared to world

Related: Economic performance relative to NATO countries
Source: USDA   University of Groningen
Data: Excel

  This shows how the GDP growth of the United States compared to the GDP growth in the other original NATO member countries. The other original NATO member countries are used as a benchmark because they have had relatively similar economic status to the United States during the entire period examined.

The U.S. economy has grown faster than the other original NATO members by a wider margin under President Obama than any other president in modern history. This is typically attributed to the U.S.'s decision to stimulate the economy in 2009 rather than implementing austerity measures as the other original NATO member countries did.



Overall, President Obama has managed to turn the terrible economic hand he was dealt into a mixed economic record. In some areas, the economy has performed remarkably, while in other areas, the performance has been disappointing. Many of the challenges President Obama faced are common to the entire developed world and the United States has certainly fared far better than the other developed nations. However, that has come at the expense of adding to the national debt, and the gains have generally been concentrated in the hands of those who need them the least.

In addition to the challenges imposed by the global economic climate, President Obama has faced extraordinary opposition by the Republicans in the legislature. Many of the acts of congressional Republicans, such as forcing the sequester, bringing the country to the brink of default twice,shutting down the government and blocking a wide variety of legislation designed to minimize the risks posed by the financial sector or to create jobs, have caused harm to the economy and prevented the economy from healing as quickly as would be desireable. However, despite these hurdles, the economy has performed passably overall and thus far, has performed quite well during President Obama's second term.



May 4, 2016

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