President-elect Trump will inherit unquestionably the strongest economy for an incoming administration since the George W. Bush administration. That strong economic performance heading up to the 2001 transition, moreover, was largely buoyed by an overvalued stock market that was about to deflate and cause a recession. There are no such obvious macroeconomic imbalances that look set to drag on growth in 2025 or beyond.

While the labor market has slightly softened in recent months, job growth in December was extremely rapid and accompanied by wage growth that remained above inflation yet fully compatible with a return to 2% inflation—the Federal Reserve’s preferred target. In short, the labor market remains extremely strong yet in no need of policy measures to rein it in. All in all, it is hard to imagine an incoming administration wanting a stronger economic situation to inherit.

Table 1 below shows a range of measures indicating the trajectory of the economy for each incoming administration since Bill Clinton.1

Table 1

Economic conditions inherited by incoming administrations in recent decades

							Averages
Monthly variables	Clinton	Bush	Obama	Trump I	Biden	Trump II	1989-2019	Dem	GOP
Unemployment rate (%)	7.4%	3.9%	6.9%	4.8%	6.8%	4.1%	5.8%	7.0%	4.3%
Prime-age EPOP (%)	78.2%	81.3%	78.0%	78.1%	76.2%	80.5%	78.8%	77.5%	80.0%
Monthly job growth, total (annual %)	0.9%	1.6%	-2.0%	1.7%	-6.0%	1.4%	1.2%	-2.3%	1.6%
Monthly job growth, private (annual %)	0.8%	1.6%	-2.5%	1.8%	-6.2%	1.3%	1.2%	-2.7%	1.6%
Manufacturing job growth (annual %)	-1.2%	-0.5%	-5.4%	-0.1%	-5.0%	-0.5%	-1.0%	-3.9%	-0.4%
Construction job growth (annual %)	-1.1%	1.9%	-9.3%	3.4%	-2.9%	2.5%	1.3%	-4.4%	2.6%
Inflation, overall (%)	3.1%	3.4%	1.6%	1.8%	1.2%	2.7%	2.5%	2.0%	2.7%
Stock price growth (inflation-adjusted %)	6.2%	-3.6%	-40.1%	4.5%	13.7%	28.8%	6.5%	-6.7%	9.9%
Quarterly variables
Real GDP growth (annual %)	3.7%	4.0%	0.3%	1.8%	-1.4%	2.7%	2.6%	0.8%	2.8%
Real GDP per capita growth (annual %)	2.3%	2.9%	-0.7%	1.0%	-1.8%	2.1%	1.6%	0.0%	2.0%
Real private business investment growth (annual %)	4.3%	8.5%	0.2%	2.0%	-6.3%	3.9%	4.7%	-0.6%	4.8%
Real wages and salaries growth (% annual)	-0.8%	0.4%	-2.2%	1.3%	1.4%	1.1%	0.5%	-0.5%	0.9%

• The incoming Trump administration will inherit an unemployment rate of 4.1%, the lowest since George W. Bush was elected. Meanwhile, President Biden inherited an unemployment rate of 6.8%.
• The share of adults between the ages of 25 and 54 with a job—also known as the prime-age employment-to-population ratio (EPOP)—sat at 80.5% at the beginning of November 2024. This is its highest handover value since the 2000 presidential election.
• Overall and private-sector job growth are running at their fastest pace since Trump was first elected in 2016.
• Manufacturing job growth has been running at a negative pace during every single election since Bill Clinton. But, the manufacturing decline being inherited by the incoming Trump administration is at its slowest pace since the first Trump administration.
• Construction job growth is running at its fastest pace since the first Trump administration.
• Inflation is a slightly different story: In 2024, inflation was running at a 2.7% pace in December before the inauguration, its highest pace since the George W. Bush administration inherited 3.4% inflation. The first Trump administration inherited a 1.8% inflation rate, and the Biden administration inherited a 1.2% inflation rate.
• Perhaps most strikingly, the incoming Trump administration is inheriting extraordinarily fast real (inflation-adjusted) growth in the stock market. The stock market grew 28.8% over the past year, more than twice as fast as what was handed off to President Biden (the previous fastest pace at a presidential administration transition).
• Growth in real gross domestic product (GDP) and GDP per capita are both running at their fastest pace since 2000.
• Growth in real private business investment is also running at its fastest pace since 2000.
• Real wage growth is running at a pace (1.1%) comparable with the 2016 (1.3%) and 2020 (1.4%) elections. Real wage growth in pre-2016 elections was running at a much slower pace, even in the 2000 election.

Besides the striking strength of the economy being handed off to the incoming Trump administration, the table also shows that Republican administrations inherit much stronger economies. On every measure tracked in the table except inflation, Republicans on average inherit economies on better trajectories—including faster measures of employment, real wage growth, GDP growth, and stock market appreciation, along with lower unemployment. Democrats, in turn, have inherited lower inflation rates on average.

This aligns with evidence from a previous report showing the strong Democratic advantage in macroeconomic performance during their terms in office (i.e., not just at hand-off to changed administrations).

Those looking to make serious evaluations of how well the incoming Trump administration manages the economy need to keep this extraordinarily strong inheritance in mind as they make these judgments.

Footnote

1. For the monthly variables, we used data available until November of the presidential election years. For the unemployment rate and prime-age EPOPs, we used a rolling three-month average of each to reduce volatility. All other variables measured a year-over-year change comparing October in the election year with the previous October. The unemployment rate, the prime-age EPOP, employment growth (overall, private, manufacturing, and construction), and inflation (or the annual change in the overall consumer price index) were all obtained from the Bureau of Labor Statistics (BLS) online databases. The real stock market data was obtained from Robert Shiller’s online database. For quarterly data, we used data from the 3^rd quarter of the election year. We used the change relative to the 3^rd quarter of the previous year to compare. The measures of GDP and business investment were both from the National Income and Product Accounts (NIPA) data from the Bureau of Economic Analysis (BEA). For measuring real wages, we used the change in hourly wage and salaries from the Employment Cost Index (ECI) from the Obama administration on. We deflated this by the overall consumer price index. For the Bill Clinton and George W. Bush administrations the ECI data were not consistently available, so we used the average hourly earnings of production and nonsupervisory workers from the Current Employment Statistics (CES) of the BLS.