Overview
President Joe Biden highlighted his administration’s economic progress during a speech at the Democratic National Convention, touting job growth, rising wages, and a decrease in inflation. However, despite some of these achievements, data shows that inflation remains higher than during the Trump era, unemployment has slowly risen in recent months, and the cost of living for Americans has escalated with skyrocketing prices for groceries, gas, and housing.
Why It Matters
Americans are facing a higher cost of living, which raises concerns about the administration’s economic policies and their long-term impact on the nation’s financial stability.
Who It Impacts
This issue affects all U.S. citizens, particularly middle- and lower-income families, as they bear the brunt of rising prices for basic necessities and housing.
President Joe Biden took the stage at the Democratic National Convention in Chicago with an optimistic outlook on his administration’s economic track record. Boasting of a strong recovery, Biden emphasized a record number of new jobs, rising wages, and inflation that he claimed is on a steady decline. “We’ve had one of the most extraordinary four years of progress ever,” Biden said. “COVID no longer controls our lives…we got from economic crisis to the strongest economy in the entire world.”
While Biden’s speech emphasized economic growth and progress, the 16 million new jobs he cited are heavily influenced by the pandemic’s recovery rather than new job creation. Millions of jobs were lost during the COVID-19 lockdowns, and much of the job growth simply reflects the economy returning to its pre-pandemic state. Despite the unemployment rate falling after COVID, it has slowly climbed in recent months, now sitting at 4.3%—a notable increase from 3.5% in February 2020, just before the pandemic’s impact.
Biden also referenced rising wages during his time in office, claiming that average hourly earnings have increased by 17%. Although this is true, the comparison to Trump’s administration is less favorable when factoring in inflation. While wage growth during the Trump era outpaced inflation, the rising wages under Biden have struggled to keep up with the climbing cost of living, with Americans saving a smaller portion of their paychecks now than before.
On the issue of inflation, Biden pointed to a significant reduction from the peak of 9.1% in mid-2022 to the current rate of 2.9%. Yet, even with this improvement, inflation remains higher than most of Trump’s presidency, which raises questions about the administration’s management of the economy. Meanwhile, Vice President Kamala Harris has acknowledged the hardship many Americans are feeling with prices still high, particularly for essential items like groceries and fuel.
The rising cost of groceries is especially concerning for American families. Since 2020, the price of bread has soared by 50%, ground beef by nearly the same amount, and dairy products like milk and butter have risen by more than 30%. Other staples like eggs and cereal have also seen sharp increases, making it difficult for families to keep up with the rising cost of food. According to the USDA, overall food prices have risen by 25% from 2019 to 2023, straining household budgets across the country.
Gas prices have followed a similar trend, with the national average climbing as high as $4.09 per gallon in 2022, a stark contrast to the average price of $2.00 during the Trump administration. Though gas prices have cooled somewhat, they remain elevated at $3.50 per gallon, making it difficult for Americans to manage their daily expenses, particularly those who rely on vehicles for commuting or work.
In addition to food and gas, the housing market has become increasingly challenging under Biden’s watch. Interest rates for a 30-year mortgage were at 2.78% when Biden took office but soared to over 7.79% by 2023. Though rates have slightly decreased, they remain at 6.49%, putting pressure on potential homebuyers and those with variable-rate mortgages. Housing prices have continued to rise, making homeownership more elusive for many Americans.
With rising unemployment, inflation higher than in the previous administration, and the cost of everyday goods climbing, many Americans are feeling the pressure. Despite the administration’s claims of economic recovery, families continue to face challenges as they navigate a high-cost economy with stagnant savings and uncertain financial futures. While progress has been made in some areas, the economic reality for many Americans remains fraught with difficulties, requiring solutions that address the cost of living, inflation, and a struggling workforce.
