Fact Check: Biden Said Inflation Was 9% When He Became President. We Checked His Claim

Anna Rascouët-Paz
·4 min read
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Claim:

Inflation was at 9% when U.S. President Joe Biden took office in January 2021.

Rating:

Rating: False
Rating: False

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.

 

As he defended his record in an interview that aired on May 8, 2024, U.S. President Joe Biden told CNN's Erin Burnett that inflation was at 9% when he took office:

After comparing Biden's statement with U.S. government statistics, we rate this claim "False." When Biden became president, inflation was at 1.4%.

The U.S. Bureau of Labor Statistics keeps track of some of the country's key economic indicators, including the year-over-year percentage change in the Consumer Price Index, the most widely used gauge for inflation. A 1% change indicates that the cost of a basket of goods and services has increased 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 did reach 9.1% during Biden's tenure, but it happened in June 2022, one year and five months after he took office, a fact that his critics were quick to point out:

What the critics don't mention is the fact that inflation is typically tied to rapid economic growth. In fact, high inflation is often a sign that the economy is overheating.

As the BLS chart shows, inflation rocketed between January 2021 and June 2022, when it peaked. This coincided with an economic growth in 2021 not seen in nearly 40 years. That year, the U.S. gross domestic product increased 5.8% (5.9% by some measures), the highest growth since 1984. The unemployment rate also plummeted during that period and has remained at historically low levels — under 4% — since the end of that year.

The economy benefited from a hefty fiscal package conceived by the Biden administration to help the country recover from the effects of the COVID-19 pandemic, Reuters reported, despite supply-chain issues it caused.

Still, when inflation began to soar, the Federal Reserve began to increase interest rates to keep it under control, a move that economists predicted would cause the economy to crash just as fast. At the end of 2022, a Bloomberg survey of economists said 85% were expecting 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.

As Burnett pointed out in the interview with Biden, however, the U.S. economy seemed to slow down in the first quarter of 2024. GDP had grown 1.6%, far below expectations. Meanwhile, inflation rose 3.4%, the most in a year.

In the same interview, Biden repeated the claim that he had created 15 million jobs during his term, a number we fact-checked in 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 10 May 2024.

Bloomberg - Are You a Robot? https://www.bloomberg.com/tosv2.html?vid=&uuid=4f33e84e-0eea-11ef-839e-a4e861498fd0&url=L29waW5pb24vYXJ0aWNsZXMvMjAyMy0xMi0yNi93aGF0LXJlY2Vzc2lvbi1ob3ctc28tbWFueS1lY29ub21pc3RzLWdvdC1pdC1zby13cm9uZz9lbWJlZGRlZC1jaGVja291dD10cnVl. Accessed 10 May 2024.

Board of Governors of the Federal Reserve System (US). 'Federal Funds Effective Rate'. FRED, Federal Reserve Bank of St. Louis, 1 July 1954, https://fred.stlouisfed.org/series/FEDFUNDS.

Mutikani, Lucia. 'Fiscal Stimulus Powers U.S. Economy in 2021 to Its Best Performance since 1984'. Reuters, 28 Jan. 2022. www.reuters.com, https://www.reuters.com/world/us/us-economy-regained-speed-q4-2021-growth-best-since-1984-2022-01-27/.

Rascouët-Paz, Anna. 'US Economy Added 15M Jobs During Biden Administration?' Snopes, 21 Mar. 2024, https://www.snopes.com//fact-check/biden-15-million-jobs/.

'Real GDP Growth Rate U.S. 2023'. Statista, https://www.statista.com/statistics/188165/annual-gdp-growth-of-the-united-states-since-1990/. Accessed 10 May 2024.

'Understanding Inflation | PIMCO'. Pacific Investment Management Company LLC, https://europe.pimco.com/en-eu/resources/education/understanding-inflation. Accessed 10 May 2024.

U.S. Bureau of Labor Statistics. 'Unemployment Rate'. FRED, Federal Reserve Bank of St. Louis, 1 Jan. 1948, https://fred.stlouisfed.org/series/UNRATE.