Unpacking Claims Mortgage Charges, Financial savings, Wages Worse Below Harris Than Trump

In September 2024, because the U.S. presidential election gathered momentum, a meme started to flow into purporting to check information on the spending energy of households between the administration of former U.S. President Donald Trump and the administration of his 2024 opponent, Vice President Kamala Harris. It appeared on Trump’s official Facebook page (archived) on Sept. 5:

As of this writing, this submit had gained 78,000 reactions and 13,000 feedback. The meme additionally appeared elsewhere on Fb, together with the Fb web page of the Republican Party of Kalamazoo County in Michigan, several X posts, and Reddit. A person additionally posted one other model of it on Instagram. 

The very first thing to notice in regards to the meme is that Harris was not the president. Reasonably, she served below Joe Biden as he led the nation. 

Excepting that, the meme, which didn’t cite any sources, both made inconsistent comparisons, did not remind viewers of outstanding circumstances —specifically, the financial results of the COVID-19 pandemic — or used numbers we could not reproduce.

Mortgage Charges

On the subject of mortgage charges, the creator of the meme seems to have chosen one of many highest doable charges attained below Biden and the one of many lowest reached below Trump, making them incomparable. Based mostly on the charges used, it appeared more than likely that the account was referring to the 30-year fixed mortgage average within the U.S. since 1971 — information compiled by Freddie Mac and charted by the St. Louis Federal Reserve. That charge hit 4.94% at its most below Trump in November 2018 because the Fed raised its federal funds rate to the two% to 2.25% vary from 1.25% to 1.5% in January of that 12 months. The Fed charge remained within the 1.5% to 1.75% vary till the COVID-19 pandemic began, at which level the Fed lowered its charge to the 0% to 0.25% vary in order to stave off an financial recession. That is the interval when the mortgage charge fell, reaching a low of two.66% two weeks earlier than Biden took workplace. 

Then inflation started to speed up below Biden as exercise throughout the nation resumed, prompting the Fed to lift its charges in March 2022 to forestall the economic system from overheating. The federal funds charge reached a peak within the 5.25% to five.5% vary, the place it remained till the Fed lowered it 25 foundation factors — a unit of measurement to convey modifications in rates of interest through which a foundation level corresponds to 0.01% — on Sept. 16, 2024. On this time of inflation and quick financial progress, banks elevated their mortgage charges to a mean 7.79% in October 2023. Ten months later, they’d dropped to six.09%. 

Crucially, the Fed’s independence from the White Home and Congress ensures that no elected official, president included, can affect charges choices.

The meme makes use of inexact numbers and makes a comparability on a matter over which a sitting president has no management. 

Private Financial savings

The meme claimed that private financial savings rose 385% below Trump and fell 73% below Biden. It wasn’t instantly clear the place these numbers got here from, because the statistic that economists favor is the personal saving rate, calculated every month because the ratio of private financial savings to disposable private revenue. 

Tracked since 1959, this charge certainly reached a file excessive of 32% in April 2020 because the COVID-19 pandemic hit the nation, forcing people inside their homes and preventing them from spending as a lot cash as they usually would. That charge then fell sharply to 12% because the summer time season arrived and other people started to aim extra outings and spent extra of their disposable revenue. In March 2021, two months into Biden’s time period, as one other wave of COVID-19 swept the nation and whereas the federal government rolled out the primary spherical of vaccines, the non-public saving charge rose to 26.1%. Financial exercise resumed in earnest after vaccines turned widespread, and the financial savings charge fell as inflation accelerated mid-2022.

private financial savings in absolute phrases, we calculated the evolution of financial savings between the beginning of every of president’s time period and the peaks that private financial savings hit, in billions of dollars. Here is what we discovered:

• From the second Trump took workplace in January 2017 to the second quarter of 2020, when private financial savings reached a peak, financial savings rose 500.33%. 
• From the second Trump took workplace to when he left in January 2021, private financial savings rose 189.40%.
• From the second Biden took workplace to when private financial savings reached a peak two months later, financial savings rose 82.50%.
• From the second Biden took workplace to the second quarter of 2024 — the final quarter for which there was information as of this writing — private financial savings dropped 68.80%.

We couldn’t discover the numbers the meme referred to, although  private financial savings elevated to file ranges below Trump because the pandemic began.

Credit score Card Delinquency

The meme stated bank card delinquencies fell 11% below Trump and rose 50% below Biden, however as soon as once more there was no readability as to what the maker of the meme based mostly these percentages on. We regarded on the monthly credit card delinquency rate and located that, very like the non-public financial savings charge, it tracked the pandemic’s ebb and stream with a three- to six-month delay, following an inverse correlation: When the pandemic acquired worse, folks stayed house and delinquencies dropped.

The bank card delinquency charge reached a then-historical low within the third quarter of 2020, falling to 2%. It continued to fall after Biden took workplace, hitting its file low of 1.54% within the third quarter of 2021. As financial exercise resumed and other people started to spend extra money, the speed started to rise as soon as extra, remaining under historic ranges. It reached a excessive of three.25% within the second quarter of 2024, the final interval for which there was information as of this writing. 

Whereas we couldn’t discover the precise quantity of bank card delinquencies in {dollars}, we checked out delinquencies in {dollars} on on all loans and leases to customers, which included bank cards. Making the identical calculations as for the non-public financial savings charge, we discovered the next:

• From the second Trump took workplace in January 2017 to the third quarter of 2020, when delinquencies reached a low, they dropped 17.62%.
• From the second Trump took workplace to when he left in January 2021, mortgage delinquencies fell 7.10%.
• From the second Biden took workplace to when delinquencies reached a low within the second quarter of 2021, they dropped 34.55%.
• From the second Biden took workplace to the second quarter of 2024 — the final quarter for which there was information as of this writing — delinquencies rose 88.93%.

We couldn’t discover the numbers the meme referred to, although delinquencies dropped below Trump when the pandemic began.

Actual Weekly Wages

The meme claimed actual weekly wages elevated 8.2% below Trump and fell 3.9% below Biden. The data compiled by the U.S. Bureau of Labor Statistics and charted by the St. Louis Fed confirmed that, certainly, actual wages rocketed in the course of the COVID-19 pandemic, reaching a historic top of $393 — a quantity based mostly on 1982-84 inflation-adjusted {dollars} — within the second quarter of 2020. 

This is because of the truth that low-paying jobs disappeared in the course of the top of the pandemic whereas employees with higher-paying jobs tailored to distant work, pushing the typical up, based on the Economic Policy Institute. As the consequences of the pandemic subsided and financial exercise picked up and inflation accelerated, actual weekly earnings fell within the second quarter of 2022. Nonetheless, they remained in a traditionally excessive vary. As we did with private financial savings and mortgage delinquencies, we calculated the evolution of actual weekly wages from the beginning of every of their mandates to subsequent peaks, after which from the start of their mandates to the tip:

• From the second Trump took workplace in January 2017 to the second quarter of 2020, when actual weekly wages reached a peak, they rose 12.61%.
• From the second Trump took workplace to when he left in January 2021, actual weekly earnings rose 7.74%.
• From the second Biden took workplace to when actual weekly earnings dipped within the second quarter of 2022, wages fell 4.5%.
• From the second Biden took workplace to the second quarter of 2024 — the final quarter for which there was information as of this writing — actual weekly earnings dropped 2.5%.

Right here, too, we couldn’t discover the numbers to which the meme referred, although actual weekly wages spiked in the course of the Trump administration after the pandemic began.

Sources