Fact-checking Trump's political ad on the economy

Former President Donald Trump's 2024 campaign recently released a 30-second ad comparing the two presidents’ records on the economy. 

The ad claims that gas prices, mortgage rates, income, and retirement savings were better during the Trump presidency than under Biden.

VERIFY looked at the data for each of those claims.

CLAIM #1

“Gas prices doubled under Biden.”

THE SOURCES

• U.S. Energy Information Administration
• AAA

THE ANSWER

Yes, in June of 2022 the price of gas was twice as high as it was when President Biden took office.

WHAT WE FOUND

When President Biden took office in January of 2021, the average price of a gallon of gas in the United States was $2.42, according to the Energy Information Administration.

By June of 2022, that price had risen to $5.03 per gallon, more than double the original amount. Experts said at the time this spike was driven in part by Russia’s invasion of Ukraine and the ensuing sanctions against Russia, a major oil exporter, as well as demand for oil post-COVID rebounding faster than supply chains.

The price has since fallen back down, with the average in December of 2023 being $3.26 per gallon.

CLAIM #2

“Take home pay? Up 6 grand under Trump. Under Biden? Down 7 thousand dollars.”

THE SOURCES

• U.S. Census Bureau
• Federal Reserve
• Heritage Foundation

THE ANSWER

Real incomes when adjusted for inflation grew during Trump’s term, then declined during Biden’s, but the specific numbers cited in the ad are not found in the data.

WHAT WE FOUND

Median household income has almost exclusively risen every year since the metric has been recorded by the U.S. Census Bureau, thanks in part to the nature of inflation. From when Trump took office in 2017 until he left in 2021, it rose by roughly $9,000. In Biden’s first year, the only year so far for which census data is available, it rose roughly $4,000.

The Census Bureau and the Federal Reserve also track “real median household income” – meaning income adjusted for inflation. Real incomes grew roughly $4,000 in Trump’s four years and declined roughly $2,000 in Biden’s first. By this metric, it’s true that incomes fared better under Trump than Biden, but not by such drastic numbers as claimed in the ad.

The ad cites the conservative-leaning Heritage Foundation for its numbers. Those numbers came from two separate analyses of economic data and policies, by two separate authors, who used two different methodologies.

To reach the $6,000 number, the first analysis took the “real income” increase at the time of publication in late 2019 – roughly $5,000 – and added to it an estimate of how much an average family saved in tax cuts approved under Trump – $1,400. The author does not specify how that estimate was calculated, or incorporate any other economic factors into the final figure.

To reach the $7,000 number, the second analysis asserted that due to inflation American families had “lost $6,000 in purchasing power” and also suffered from $1,400 in “increasing borrowing costs” – but did not provide a source for either figure. Again, no other economic factors were incorporated into the calculation.

CLAIM #3

Mortgage rates were as low as 3% under Trump and as high as 8% under Biden.

THE SOURCES

• Freddie Mac
• The Mortgage Reports

THE ANSWER

Yes, mortgage rates were as low as 3% under Trump and as high as 8% under Biden.

WHAT WE FOUND

When President Trump took office, the 30-year fixed rate average mortgage rate was 4.2%, according to data from Freddie Mac compiled by the Federal Reserve.

Over the course of his term, the average rate went as low as 2.7% and as high as 4.9%.

When Biden became president the average rate was 2.8% – it went as low as 2.7% and has gone as high as 7.8%.

The ad rounds the rates up to the nearest whole number to reach 3% and 8%.

Mortgage rates currently sit at an average of 6.7%.

Economists say the increases were significantly driven by the Federal Reserve’s decision to raise interest rates in an effort to cool inflation.

CLAIM #4

401k balances hit a record high under Trump and fell under Biden.

THE SOURCES

• Fidelity
• Vanguard

THE ANSWER

Record highs were set for average 401k balances under Trump, but those records were then broken under Biden in 2021. Balances then dropped in 2022 before regaining in 2023.

WHAT WE FOUND

According to data from Fidelity Investments, the average American 401k balance hit record highs during the Trump administration, peaking at $121,500 in the last quarter of 2020, Trump’s final year in office.

However, those records were immediately broken during the Biden administration. Average balances continued to grow, reaching a high of $130,700 in the last quarter of 2021.

Balances took a hit in 2022, dropping as low as an average of $97,200, but bounced back in 2023, with the most recent data from Fidelity showing an average of $107,700 in the third quarter of 2023.