Cash & Liquidity ManagementInvestment & FundingEconomyStudy examines which US party might be better for the economy

Study examines which US party might be better for the economy

A recent Gallup poll found that respondents identified the 'economy in general' as their biggest concern.

A recent Gallup poll found that respondents identified the ‘economy in general’ as their biggest concern. A new report from WalletHub aims to provide insight into one of the key issues of the 2016 US elections: which party is better for the economy?

For the report, WalletHub analysts examined the years during which the Democrats or the Republicans were in control of the presidency, legislature or both according to 13 key indicators of economic performance. These range from ‘real gross domestic product (GDP) growth’ to ‘annual poverty rate change’ to ‘change in annual national debt as a percentage of GDP’. In addition, each metric under the administration of each president who served between 1950 and 2015 was analysed to determine which president had the most positive impact on the economy.

The report finds that, overall, the economy has performed best under the combination of a Democratic presidency and Republican Congress. In the past 66 years, real GDP has grown fastest under Democratic control of both the executive and legislative branches of government, at an average of 4.21% per year, and most slowly under a Democratic presidency and divided Congress, at an average of 1.97% per year.

The stock market has performed best under a Democratic presidency and Republican Congress, with the S&P 500 producing an average annual return of 17.03%, and worst under a Republican presidency and divided Congress, with an average annual return of 3.28%.

The change in annual national debt as a percentage of GDP (adjusted for inflation) has had the highest decrease (1.52%, on average) under a Democratic presidency and Republican Congress and the highest increase (2.98%) under a Democratic presidency and divided Congress.

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