Price shock Are you feeling better off now? Why US voters should, but may not, say yes

Are you feeling better off now? Why US Voters should, but may not, say yes

- Larry Elliott

When Ronald Reagan beat Jimmy Carter in the 1980 presidential election, 10 short words proved decisive. After a period in which high inflation had eroded living standards, the Republican challenger asked voters: "Are you better off than you were four years ago?”

The simple question that resonated so strongly with American voters 44 years ago has resurfaced in 2024 as the race between the current vice-president, Kamala Harris, and the former president Donald Trump goes down to the wire.

By any objective measure, the answer to Reagan's question should be “yes”. The US economy has created more jobs – 16m – under Joe Biden than during any four-year presidential term since the second world war. In the three years before the Covid crisis sparked mass – mostly temporary – layoffs in 2020, the economy under Trump created just under 7m jobs.

And if growth has been modest compared with the far more rapid expansion in the 1950s and 60s – averaging just over 2% under Biden – it has been considerably faster than in other leading industrial nations.

Every member of the G7 group plunged into recession when the pandemic struck, but the US has posted by far the strongest recovery. Figures supplied by the House of Commons library showed the US economy was almost 11% bigger than it was at the end of 2019, compared with a rise of 3.9% for the eurozone and 2.9% for the UK.

Nor is this just a recent phenomenon. Since 2010 the US economy has grown by 34%, the EU by 21% and the gap in per capita incomes has widened steadily over time. Last month's hard-hitting report on EU growth by Mario Draghi, the former head of the European Central Bank, highlights the US's lead over Europe in hi-tech sectors and says the bloc is caught in a "middle-tech trap".