Fact-checking Joe Biden on inflation, the deficit and consumer confidence in the State of the Union

As president, Joe Biden saw the economy endure 40-year-high levels of inflation. But during his 2024 State of the Union address, he took a victory lap on the reduced inflation rate, job creation and other economic metrics.

"I came to office determined to get us through one of the toughest periods in our nation’s history," Biden said. "And we have. It doesn’t make the news, but in thousands of cities and towns the American people are writing the greatest comeback story never told." 

We have found many of the claims he repeated to be accurate or close.

Biden said the U.S. has seen "15 million new jobs in just three years." (Rounded, he’s correct; it’s about 14.8 million.) He said unemployment is "at 50-year lows." (It was at 50-year lows in 2023 but has climbed marginally since then.) He said there are "800,000 new manufacturing jobs in America and counting." (We rated a similar Biden statement Mostly True.)

He said, "The racial wealth gap is the smallest it’s been in 20 years." (This is accurate by one measure but not by another.) And he said, "Wages keep going up and inflation keeps coming down." (Wages adjusted for inflation are on track to return to where they were when Biden was inaugurated within a few months; for the past year-plus, wages have outpaced inflation.)

Three statements about inflation, consumer confidence and the deficit needed more context.

The U.S. has lower inflation than most advanced industrialized nations, but it does not rank No. 1 internationally.

Biden is correct that year-over-year inflation has dropped from 9% in summer 2022 to a little above 3% today amid sharp interest rate hikes by the Federal Reserve.

In December 2023, seven countries in the Organization for Economic Cooperation and Development  — Canada, Denmark, Italy, Latvia, Lithuania, the Netherlands and South Korea — had inflation rates lower than that of the U.S. 

Twenty OECD member countries had higher inflation rates than the U.S., including France, Germany and the United Kingdom, each of which belongs to the G-7 of elite economies.

It depends on the measure.

Two long-running consumer confidence measures are released by the University of Michigan and the Conference Board, a business membership and research organization. 

Consumer confidence, as measured by the University of Michigan survey, has climbed sharply since bottoming out in summer 2022, when inflation reached 9%, a four-decade high. However, the rating under Biden remains lower than it was for four of the past five presidents at the same point in their tenures.

And for more than two years through December 2023, the survey’s consumer sentiment score was lower than it was in April 2020 — a startling finding, given that in April 2020 the unemployment rate was 13.2% and Americans were facing the uncertainty of a once-a-century pandemic.

Biden scores higher on the Conference Board survey, which has more questions based on the labor market than on inflation. 

The labor market has been an economic strength on Biden watch. And the Conference Board survey shows consumer sentiment is now higher than it was under three of the previous four presidents at this point in their tenures.

Other surveys show a continuing sour public sentiment about the economy. For instance, a February Marquette Law School poll found that 35% of national respondents said the economy was "excellent" or "good," compared with 65% who said it was "not so good" or "poor."

This merits asterisks. The deficit — the difference between federal spending and federal revenues — fell by $1.4 trillion between 2021, Biden’s first year in office, and 2022, his second year. That was a larger decline than any in any previous one-year span. 

However, this reduction stems largely from the phasing out of pandemic era relief programs. Also, even at its reduced levels, the deficit remains higher under Biden than it was pre-pandemic. The deficit in 2022 and 2023 under Biden was higher than in each of Trump’s first three years, partly because of bills such as the 2021 American Rescue Plan, a pandemic recovery measure.

In addition, the cumulative debt has continued to climb even though the deficit has narrowed.