Economic performance looms large in every presidential election year. In 2024, people’s perception of their own economic situation is high, yet their estimation of the economy’s performance more generally has been noticeably negative. It is often taken as given in economic commentary that the economy was stronger pre-pandemic. This impression is deeply mistaken.

The economy today is extraordinarily strong by nearly every historical benchmark, including relative to the years immediately preceding the pandemic. Unhappiness about the economy’s performance is mostly a hangover induced by the extreme shocks and aftereffects of the pandemic and the Russian invasion of the Ukraine. These shocks led to a pronounced “bullwhip effect”—the economy saw aggregate demand collapse which led to unemployment spiking (during the late Trump administration) and then demand snapped back as supply chains broke down which caused inflation to spike (during the early Biden administration).

By the end of 2022, the shocks had largely subsided and their economic effects were being quickly dampened. A serious assessment of how the economy is doing today should look past these short-term bullwhip effects and focus on comparisons of the pre- and post-shock “normal.”

The table at the bottom of this post compares economic performance along a range of measures across three time periods: since the end of 2022, the last full business cycle before the pandemic (2007–2019), and between 2017–2019—the tail end of that business cycle’s expansion that coincided with the Trump administration before the damaging pandemic effects were felt.

Compared with the other two periods, the second half of the Biden administration has seen pronounced economic strength. Each indicator is summarized below:

• Inflation-adjusted wages have reached a record high and have grown more rapidly.
  • For all workers, hourly wages in real dollars (adjusted to September 2024 values) averaged $35.36 in September 2024, compared with $34.52 at the end of 2019. Since 2022, wages rose 1.2% annually, compared with a 0.8% rate over the 2007–2019 business cycle and a 0.9% rate between 2017–2019.
  • For nonsupervisory workers (the 80% of private-sector workers who are not managers), real hourly wages were $30.33 in September 2024, compared with $28.99 at the end of 2019. Wages rose 1.3% annually since 2022, compared with 0.8% growth over the 2007–2019 business cycle and 1.0% growth between 2017–2019.
• Inflation-adjusted gross domestic product (GDP) growth is rising more rapidly.
  • Real GDP has risen 2.9% annually since 2022, compared with 1.8% growth between 2007–2019 and 2.5% growth between 2017–2019.
  • Per-capita real GDP has risen 2.4% annually since the end of 2022, compared with 1.1% growth between 2007–2019 and 1.9% growth between 2017–2019.
• The unemployment rate has been lower on average, including for nearly every group of workers.
  • Overall unemployment has averaged 3.8% since 2022, compared with 6.4% between 2007–2019 and 4.0% between 2017–2019.
  • For Black workers, unemployment has averaged 5.7% since 2022, compared with 11.1% between 2007–2019 and 6.7% between 2017–2019.
  • For Hispanic workers, unemployment has averaged 4.8% since 2022, compared with 8.1% between 2007–2019 and 4.7% between 2017–2019.
• The share of prime-age adults (those between the ages of 25–54) with a job is higher on average.
  • For all workers, the prime-age employment-to-population ratio (EPOP) has averaged 80.7% since 2022, compared with 77.2% between 2007–2019 and 79.3% between 2017–2019.
  • For Black workers, the prime-age EPOP has averaged 77.8% since 2022, compared with 71.4% between 2007–2019 and 75.8% between 2017–2019.
  • For Hispanic workers, the prime-age EPOP has averaged 78.1% since 2022, compared with 74.1% between 2007–2019 and 77.0% between 2017–2019.
• Job growth has been faster both overall and for the private sector only.
  • Overall job growth has averaged 217,000 per month since 2022, compared with 93,000 jobs between 2007–2019 and 176,000 jobs between 2017–2019.
  • Private-sector job growth has averaged 170,000 per month since 2022, compared with 91,000 jobs between 2007–2019 and 164,000 jobs between 2017–2019.
• The rate of new business formations is far higher.
  • The rate of high-propensity applications for new businesses has averaged 144,000 monthly since 2022, compared with 102,000 between 2007–2019 and 106,000 between 2017–2019.
• The stock market—adjusted for inflation—is higher and has grown much more rapidly.
  • The S&P 500, adjusted for inflation, averaged 4,842 since 2022, compared with an average level of 2,410 between 2007–2019 and 3,392 between 2017–2019.
  • The S&P 500 has grown 19.6% annually since 2022, compared with 6.6% growth between 2007–2019 and 10.0% between 2017–2019.

The only measure where things look a bit worse than in previous periods is the average level of inflation since the end of 2022. But the time since 2022 has also seen a historically rapid deceleration of inflation—far faster than in any previous period. In short, inflation over the past 20 months is the rapidly fading end of the shocks of the early 2020s.