A U.S. president’s policies can greatly affect gross domestic product (GDP), an indicator used to measure a country’s economic activity. GDP is the monetary value of all finished goods and services produced in a country during a specific period. GDP growth measures the change in GDP between two periods.
Both GDP and GDP are used to reflect economic performance during a presidential administration. However, the indicator comes with limitations as well, as it can be affected by events and circumstances beyond a president’s control.
Key Takeaways
- A president’s fiscal and monetary policies can significantly impact GDP, which is a crucial measure of economic activity.
- President Franklin D. Roosevelt had the highest average annual growth at 10.1%, because of increased government spending for World War II.
- President Herbert Hoover had the worst annual GDP growth of all U.S. presidents so far at -9.3%, due to the Great Depression.
- The biggest drop in GDP growth was in 1932, the worst year of the Great Depression, when GDP growth was -12.9% during Hoover’s term.
Effectively, GDP serves as a report card on the overall health of the economy. The metric is closely followed by policymakers, investors, and businesses when making strategic decisions. The White House and Congress use GDP to prepare the federal budget, and the Federal Reserve uses it to make decisions about monetary policy.
In this article, we are using real GDP to show the average annual GDP growth rate by president, since it accounts for inflation.
Note
Real GDP is the value of a country’s total output of goods and services adjusted for inflation or deflation.
Historical U.S. GDP Growth
According to economists, the ideal average annual GDP growth should be 2% to 3% each year. President Franklin D. Roosevelt had the highest average annual growth at 10.1%, because of increased government spending for World War II. President Herbert Hoover had the worst annual GDP growth of all U.S. presidents so far at -9.3%, due to the Great Depression, which began and lasted through his term. The biggest drop in GDP growth was in 1932, the worst year of the Great Depression, when GDP growth was -12.9% during Hoover’s term.
Rapid GDP growth does not always equal a strong economy—if the economy grows too quickly, it can cause inflation or create a bubble.
At the same time, if the economy slows down too much, and too fast, that can cause a recession. The goal is to maintain the GDP at a steady rate that can be sustained over time, so presidents with average GDP growth of 2% to 3%—which economists consider a healthy range—will have the best growth.
GDP Growth by President
Here’s a breakdown of the GDP growth rate under each U.S. president—starting with Hoover in 1929—and the events that affected each person’s presidency.
| President | Years | Average Annual GDP Growth |
| Herbert Hoover | 1929–1933 | -9.3% |
| Franklin D. Roosevelt | 1933–1945 | 10.1% |
| Harry S. Truman | 1945–1953 | 1.4% |
| Dwight D. Eisenhower | 1953–1961 | 2.8% |
| John F. Kennedy | 1961–1963 | 5.2% |
| Lyndon B. Johnson | 1963–1969 | 5.2% |
| Richard Nixon | 1969–1974 | 2.7% |
| Gerald R. Ford | 1974–1977 | 5.4% |
| Jimmy Carter | 1977–1981 | 2.8% |
| Ronald Reagan | 1981–1989 | 3.6% |
| George H.W. Bush | 1989–1993 | 1.8% |
| Bill Clinton | 1993–2001 | 4% |
| George W. Bush | 2001–2009 | 2.4% |
| Barack Obama | 2009–2017 | 2.3% |
| Donald Trump | 2017–2021 | 2.3% |
| Joe Biden | 2021– | 2.2% |
Herbert Hoover (1929–1933)
Average Annual GDP Growth Rate: -9.3%
President Herbert Hoover had the worst average annual GDP growth rate so far, at -9.3%. That’s because the stock market crashed in the first year of Hoover’s term, in October 1929, and led to the Great Depression, the most severe and longest economic recession in modern world history.
Hoover took a laissez-faire (low government intervention) approach in response to the Great Depression and vetoed several bills that would have provided relief to Americans impacted by the recession. He also signed the Smoot-Hawley Tariff Act into law, which raised the costs of important goods and affected trade. The GDP fell to -12.9% in 1932, while unemployment soared to 25% in 1933.
Franklin D. Roosevelt (1933–1945)
Average Annual GDP Growth Rate: 10.1%
President Franklin D. Roosevelt had an average annual GDP growth rate of 10.1% during his four-term presidency, the highest growth rate of presidents so far. FDR introduced a series of government programs known as the New Deal to help stimulate the economy during the Great Depression. The New Deal aimed to maintain infrastructure, create jobs, and boost businesses across the country. The New Deal also included programs such as Social Security.
While the New Deal did help the economy recover and helped reduce income inequality in the United States, some economists question its true impact on the economy and even say it may have prolonged the recession by several years. Critiques of the New Deal say too much government aid may have hindered the economy’s natural way of rebounding after a deep recession. Still, economists consider 1941 as the end of the Great Depression, when GDP increased and unemployment dropped. This was also the year when the U.S. entered WWII.
FDR’s social programs also came with major tax increases and national debt. Roosevelt contributed the largest percentage increase to the U.S. national debt between his New Deal initiatives and spending on World War II, which was the biggest contributor to debt.
Harry S. Truman (1945–1953)
Average Annual GDP Growth Rate: 1.4%
President Harry Truman had an average annual GDP growth rate of 1.4%. The economy went through two mild recessions during Truman’s term: one in 1945 due to a drop in government spending after the end of WWII, and another from 1948 to 1949 as the economy corrected in the wake of a postwar spending boom.
Truman had the difficult job of transitioning the economy from wartime to peacetime without sending it into a recession and did maintain a healthy peacetime economy overall. Truman also wanted to extend some of the New Deal economic programs such as higher minimum wage and housing. Still, only a few of his proposals became law due to facing opposition in Congress. Truman’s Marshall Plan sent $12 billion to help rebuild Western Europe after WWII, boosting the U.S. economy by creating a demand for American goods. The Korean War began during Truman’s term in 1950, which led to $30 billion in government spending, which also helped boost economic growth under Truman.
Dwight Eisenhower (1953–1961)
Average Annual GDP Growth Rate: 2.8%
President Dwight D. Eisenhower had an annual GDP growth rate of 2.8%. Eisenhower ended the Korean War in 1953, and the economy went through three recessions during his time in office. Eisenhower helped boost economic growth with his Federal-Aid Highway Act in 1956, which was aimed at rebuilding the country’s interstate highways. The government spent a total of $119 billion on the project.
The economy contracted into a recession again from 1957 to 1958, when the Federal Reserve raised interest rates. However, Eisenhower refused to use fiscal policy to stimulate the economy in favor of maintaining a balanced budget.
John F. Kennedy (1961–1963)
Average Annual GDP Growth Rate: 5.2%
President John F. Kennedy had an average annual GDP growth rate of 5.2%. Kennedy and his administration helped end the 1960 recession (the fourth major recession since WWII) by increasing domestic and military spending. Kennedy also raised the minimum wage and Social Security benefits.
Lyndon B. Johnson (1963–1969)
Average Annual GDP Growth Rate: 5.2%
President Lyndon B. Johnson had an average annual GDP growth rate of 5.2%. LBJ was sworn in two hours after Kennedy’s assassination and was re-elected in 1964 after getting 61% of the vote.
Johnson increased government spending and pushed through tax cuts and the civil rights bill proposed during Kennedy’s term. Johnson’s Great Society program in 1965 created social programs such as Medicare, Medicaid, and public housing. While the economy grew under LBJ with strong businesses and low unemployment, prices began to rise rapidly, and inflation ticked up. However, Johnson did not raise taxes to curb spending and cool inflation. Johnson escalated the Vietnam War, which began during his term, but he was unable to end it.
Richard Nixon (1969–1974)
Average Annual GDP Growth Rate: 2.7%
President Richard Nixon had an average annual GDP growth rate of 2.7%. Though Nixon attempted to cool inflation that began during LBJ’s term without causing a recession, his economic policies caused a period of stagflation that lasted for a decade. This period was a result of double-digit inflation and economic contraction.
Nixon imposed tariffs and wage-price controls, which led to layoffs and slower growth. The value of the dollar also fell during Nixon’s term, when he ended the gold standard. The aftermath of Nixon’s economic policies are called the Nixon Shock.
Gerald R. Ford (1974–1977)
Average Annual GDP Growth Rate: 5.4%
President Gerald R. Ford had an average annual GDP growth rate of 5.4%. The economy had contracted and was in a recession from 1974 to 1975 due to stagflation from Nixon’s time. Ford and his administration cut taxes and reduced regulation to stabilize the economy, and ended the recession. However, inflation still remained high.
Jimmy Carter (1977–1981)
Average Annual GDP Growth Rate: 2.8%
President Jimmy Carter had an average annual GDP growth rate of 2.8%. Stagflation continued into Carter’s term, and was made worse by an energy crisis that led to soaring gas prices and shortages. Carter deregulated oil prices to stimulate domestic production and deregulated the airline and trucking industries. The Iranian hostage crisis in 1979 led to economic contraction. Carter also had the highest inflation rate among U.S. presidents to date.
Ronald Reagan (1981–1989)
Average Annual GDP Growth Rate: 3.6%
President Ronald Reagan had an average annual GDP growth rate of 3.6%. The economy went into a recession in 1981 after the Fed raised interest rates to 20% in an effort to cool inflation.
Reagan’s economic policies, later known as Reaganomics, aimed to end the recession by decreasing government spending, tax cuts, increased military spending, and reduced social spending. While these policies helped bring inflation down, Reagan added over $1.86 trillion to the national debt and made the budget deficit worse. Critics of Reagan’s economic policies also say he widened the nation’s wealth gap, and that his deregulation of the financial services industry may have contributed to the Savings and Loan Crisis in 1989.
George H.W. Bush (1989–1993)
Average Annual GDP Growth Rate: 1.8%
President George H.W. Bush had an average annual GDP growth rate of 1.8%. Bush’s administration had to contend with the fallout of the Savings and Loan Crisis, which unfolded during the 1980s and 1990s and contributed to a recession in 1990–1991. In 1989, Bush agreed to a $100 billion government bailout plan to help banks out of the Savings and Loan Crisis. Bush also raised taxes and cut government spending in an effort to reduce the budget deficit.
Bill Clinton (1993–2001)
Average Annual GDP Growth Rate: 4.0%
President Bill Clinton had an average annual GDP growth rate of 4%. The economy grew for 116 consecutive months, with 22.5 million jobs created in Clinton’s two terms. Clinton signed the North American Free Trade Agreement (NAFTA), which increased growth by getting rid of tariffs between the U.S., Canada, and Mexico. Clinton also lowered the national debt, creating a budget surplus of $70 billion. Clinton also raised taxes on the wealthy and briefly cut government spending to reform welfare.
George W. Bush (2001–2009)
Average Annual GDP Growth Rate: 2.4%
President George W. Bush had an average annual GDP growth rate of 2.4%. Bush’s two terms came with major events such as the 9/11 attacks (2001), Hurricane Katrina (2005), and the 2008 recession. Bush launched the War on Terror, and created and expanded the U.S. Department of Homeland Security (DHS), in response to the 9/11 attacks. Bush also faced the Great Recession in 2008, which was considered the most severe recession since the Great Depression. Bush’s military spending and significant tax cuts in response to the recession added about $4 trillion to the national debt.
Barack Obama (2009–2017)
Average Annual GDP Growth Rate: 2.3%
President Barack Obama had an average annual GDP growth rate of 2.3%. Obama ended the 2008 recession he inherited with the American Recovery and Reinvestment Act (ARRA), an $831 billion stimulus package passed by Congress aimed at cutting taxes, extending unemployment benefits, and improving infrastructure and education. However, Obama is the president who added the most to national debt, in dollar amounts, with his recession relief measures.
Still, Obama bailed out the auto industry in the U.S. and created 11.3 million new jobs during his two terms. Inflation and interest rates also remained low. He also ended the Iraq War and reduced troops in Afghanistan. Obama’s economic policies, now known as Obamanomics, were controversial at the time, and his role in ending the 2008 recession is still debated today.
Donald Trump (2017–2020)
Average Annual GDP Growth Rate: 2.3%
President Donald Trump had an average annual GDP growth rate of 2.3%. While there were no major wars or recessions during Trump’s presidency, he did face the COVID-19 pandemic in 2020, during his last year in office. Trump increased spending and cut taxes, while the Fed raised interest rates in response to Trump’s expansionary fiscal policies.
Trump placed import taxes on products from China, particularly steel and aluminum, to boost sales of American-made products. However, it hurt the sales of American exports instead, as China responded by placing tariffs on products it imported from the U.S. It also increased costs for American consumers.
The economy went into recession with the onset of the COVID-19 public health crisis in March 2020, as businesses closed down and Americans sheltered in place. The recession was short but severe, and the Trump administration responded by declaring a state of emergency and passing a $2 trillion stimulus package called the CARES (Coronavirus Aid, Relief, and Economic Security) Act. The CARES Act provided relief for businesses and individuals through stimulus payments and a pause on student loan payments, among other measures, but it was not enough to pull the economy out of the pandemic-induced recession.
Joe Biden (2021–)
Average Annual GDP Growth Rate: 2.2%
President Joe Biden has had an annual GDP growth rate of 2.2% so far. Biden took office in the middle of the COVID-19 pandemic, and signed the American Rescue Plan Act in 2021, which was a $1.9 trillion stimulus package to provide economic relief from the pandemic.
While the recession caused by the pandemic was severe but short-lived, it was followed by record-high inflation partly due to the Russian invasion of Ukraine, which caused gas prices to soar in 2022, supply chain snarls, higher demand for goods, and increased consumer spending from federal stimulus checks. The Federal Reserve responded by raising interest rates 11 times since March 2022 in an attempt to cool inflation, and while inflation did come down in 2023 from its record highs, it still remains above the Fed’s 2% target.
Comprehensive economic data will be available in a few years for Biden’s presidency.
How Does the President Impact GPD?
Since GDP is the most popular way to measure economic growth, it can show us how the economy performed under each U.S. president. How the economy does under a president is an important factor that voters consider when evaluating a president’s time in office. Also, economic policies are one of the main issues that presidents address while running for office.
Presidents indeed play a role in determining GDP. The president and Congress set fiscal policy to help direct the economy. The executive and legislative branches, for instance, can lower taxes and increase government spending to boost the economy or the opposite.
While the president plays an important role in guiding the economy, external factors that can slow down the economy—such as wars, recessions, or public health crises—also significantly impact the economy and can be out of the president’s control. In addition, the Federal Reserve—which is independent of the federal government—sets monetary policy, which can also influence the economy.
What Is the Difference Between Real GDP and Nominal GDP?
Nominal GDP is the total value of all goods and services produced over a given time period, either quarterly or annually. Real GDP is nominal GDP, just adjusted for inflation. Economists use real GDP because it is a more accurate measure of economic growth, since it adjusts for inflation.
Which President Has the Highest GDP Growth Rate in U.S. History?
President Franklin D. Roosevelt had the highest average annual GDP growth rate so far, at 10.1%. However, FDR also contributed the largest percentage increase to the U.S. national debt between his New Deal initiatives and spending on World War II.
What Is the Ideal GDP Growth Rate?
According to economists, the ideal average annual GDP growth should be 2% to 3% each year.
The Bottom Line
Looking at GDP is one of the most widely used measures of economic growth, and is considered one of the most accurate economic indicators. Since a president’s economic policies can have a significant impact on GDP, it can be used as a way to examine how the economy did under each U.S. president.
However, it is important to remember that some economic events such as severe recessions, natural disasters, public health crises, and other catastrophic events can affect the economy and have little to do with who is in office. Still, the way a president, along with the central bank, sets and enacts monetary policy in response to such events also influence the economy.
While GDP is a widely used and accurate indicator, it’s not always a perfect one and has some drawbacks. That’s because it gives more of an overall picture of the economy and does not really account for informal or underground economic activity, income disparities, or the actual economic well-being of citizens. It’s an overall picture of the country’s output, and not necessarily a comprehensive measure of a nation’s development or well-being. However, it does show how the economy contracts and expands through the business cycle in response to various economic events.
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