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• Wages have risen faster than inflation in August and September, but not for Biden’s presidency as a whole.
• The gains in August and September are only starting to dig inflation-adjusted wages out of the hole they fell into during the first seven months of Biden’s tenure.
President Joe Biden defended his record on the U.S. economy while attending the international climate change conference in Glasgow, Scotland.
Biden entered the United Nations’ COP 26 summit facing supply chain challenges and high levels of inflation back home. At a press conference, he said the U.S. is still in a better place than a year ago, when the coronavirus pandemic limited family gatherings and hampered the economy.
"This Thanksgiving, we're all in a very different circumstance," Biden said on Nov. 2. "Things are a hell of a lot better, and the wages have gone up higher, faster than inflation."
On inflation and wages, Biden has a point for the most recent two months — August and September 2021. However, inflation outpaced wages by so much earlier in his presidency that these two months haven’t changed the overall picture much. All told, Americans are worse off on the comparison of inflation and wages than they were roughly a year ago. (The White House did not respond to an inquiry for this article.)
We looked at two common metrics: the consumer price index for inflation, and average hourly earnings at private employers. Specifically, we compared the current levels of both measurements to their levels in December 2020, right before Biden took office.
During that period, inflation increased by 4.8%. Wages haven’t risen that fast; they’ve increased by 3.1%.
"In recent months, consumer prices have been climbing faster than wages for the wage and salary workforce as a whole," said Gary Burtless, an economist at the Brookings Institution.
Biden is on safer ground for the most recent two months for which data is available.
In August, inflation rose by 0.27% over the previous month, while wages rose by 0.36%. And in September, inflation rose by 0.41%, while wages rose by 0.62%.
In every previous month during his presidency, inflation outpaced wages.
"The statement about wages being up more than inflation does depend on your baseline," said Nick Bunker, economic research director for North America at the Indeed Hiring Lab.
Biden said that "wages have gone up higher, faster than inflation."
That was the case in August and September. But the gains from those two months are only starting to dig inflation-adjusted wages out of the hole they fell into during the first seven months of Biden’s tenure.
We rate the statement Mostly False.
Joe Biden, remarks at a press conference, Nov. 2, 2021
Federal Reserve Bank of St. Louis, consumer price index, accessed Nov. 2, 2021
Federal Reserve Bank of St. Louis, average hourly earnings at private employers, accessed Nov. 2, 2021
Email interview with Dean Baker, senior economist with the Center for Economic and Policy Research, Nov. 2, 2021
Email interview with Gary Burtless, senior fellow at the Brookings Institution, Nov. 2, 2021
Email interview with Nick Bunker, economic research director for North America at the Indeed Hiring Lab, Nov. 2, 2021
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