Claim:
Inflation was 9% when the United States President Joe Biden took office in January 2021.
Rating:
Context:
Inflation was 1.4% when Biden took office. It reached 9.1% nearly a year and a half into his presidency, coinciding with a period of rapid economic growth.
While defending his record in an interview broadcast on May 8, 2024, US President Joe Biden told CNN’s Erin Burnett that inflation was at 9% when he took office:
After comparing Biden’s statement with US government statistics, we consider this claim to be “false.” When Biden became president, inflation was 1.4%.
The U.S. Bureau of Labor Statistics tracks some of the nation’s key economic indicators, including the year-over-year percentage change in the Consumer Price Index, the most widely used indicator of inflation. used. A change of 1% indicates that the cost of a basket of goods and services has increased by 1% over the previous 12 months.
The chart on this BLS page shows that in January 2021, inflation was at 1.4%:
(U.S. Bureau of Labor Statistics)
Inflation actually reached 9.1% during Biden’s term, but that happened in June 2022, a year and five months after he took office, a fact his detractors were quick to point out:
.@POTUS @JoeBiden falsely claims that the inflation rate was 9% “when I came to power”. In fact, it was about 1.4%, and Biden and Democrats in Congress passed a spending package that had it peaking near 9% in the summer of 2022. pic.twitter.com/m8FlaXzUji
-Joe (@9Joe9) May 9, 2024
What critics don’t mention is the fact that inflation is generally linked to rapid economic growth. In fact, high inflation is often a sign that the economy is overheating.
As the BLS chart shows, inflation soared between January 2021 and June 2022, when it peaked. This coincided with economic growth in 2021 not seen in almost 40 years. That year, U.S. gross domestic product grew 5.8% (5.9% by some measures), the highest growth since 1984. The unemployment rate also fell during this period and is remained at historically low levels – below 4% – since the end of this period. year.
The economy benefited from a broad fiscal package designed by the Biden administration to help the country recover from the effects of the COVID-19 pandemic, Reuters reported, despite the supply chain problems it has provoked.
Yet when inflation began to soar, the Federal Reserve began raising interest rates to keep it under control, a move that economists feared would cause the economy to collapse just as quickly. At the end of 2022, a Bloomberg survey of economists indicated that 85% of them expected a recession before the end of 2023. Instead, the economy grew 2.5% that year. The Fed’s effective interest rate was 5.33% as of this writing.
However, as Burnett pointed out in the interview with Biden, the US economy appeared to slow in the first quarter of 2024. GDP grew by 1.6%, well below expectations. At the same time, inflation increased by 3.4%, its highest level in a year.
In the same interview, Biden reiterated that he created 15 million jobs during his term, a number we verified as of March 2024.
Sources:
“12-Month Percentage Change, Consumer Price Index, Selected Categories.” Bureau of Labor Statistics, https://www.bls.gov/charts/consumer-price-index/consumer-price-index-by-category-line-chart.htm. Accessed May 10, 2024.
Bloomberg – Are you a robot? ^ lY29ub21pc3RzLWdvdC1pdC1zby13cm9uZz9lbWJlZGRlZC1jaGVja291dD10cnVl. Accessed May 10, 2024.
Board of Governors of the Federal Reserve (United States). “Effective Federal Funds Rate.” FRED, Federal Reserve Bank of St. LouisJuly 1, 1954, https://fred.stlouisfed.org/series/FEDFUNDS.
Mutikani, Lucie. “Fiscal stimulus allows the US economy in 2021 to achieve its best performance since 1984”. ReutersJanuary 28, 2022. www.reuters.comhttps://www.reuters.com/world/us/us-economy-regained-speed-q4-2021-growth-best-since-1984-2022-01-27/.
Rascouët-Paz, Anna. “The US economy created 15 million jobs under the Biden administration? SnopesMarch 21, 2024, https://www.snopes.com//fact-check/biden-15-million-jobs/.
“U.S. Real GDP Growth Rate 2023.” Statist, https://www.statista.com/statistics/188165/annual-gdp-growth-of-the-united-states-since-1990/. Accessed May 10, 2024.
« Understanding inflation | PIMCO’. Pacific Investment Management Company LLC, https://europe.pimco.com/en-eu/resources/education/understanding-inflation. Accessed May 10, 2024.
U.S. Bureau of Labor Statistics. ‘Unemployment rate’. FRED, Federal Reserve Bank of St. LouisJanuary 1, 1948, https://fred.stlouisfed.org/series/UNRATE.
yahoo
