During a White House press conference on Wednesday, Joe Biden addressed the nation’s economic status, claiming that when he entered office, inflation was “skyrocketing” and that his administration had significantly reduced it. “Look, we have dramatically reduced inflation from 9% down to close to 3%. We’re in a situation where we’re better situated, and we were, when we took office, where inflation was skyrocketing,” Biden stated.
However, an analysis of economic data from the time Biden assumed office paints a different picture regarding the inflation rates he inherited. Contrary to Biden’s claim of inheriting skyrocketing inflation, official figures from January 2021, when Biden was inaugurated, show that the consumer price index (CPI) had increased by only 1.4 percent from the previous year. The increase recorded the following month in February was slightly higher at 1.7 percent.
Similarly, the personal consumption expenditure price index, which is the Federal Reserve’s preferred gauge for measuring inflation and targets a 2 percent rate, stood at 1.6 percent in January 2021 and edged up to 1.8 percent in February. It wasn’t until March 2021 that inflation rates began to exceed the Federal Reserve’s target.
This surge in inflation coincided with significant fiscal stimulus introduced under the Biden administration, notably the American Rescue Plan enacted on March 11, 2021. This legislation infused the economy with $1.9 trillion in stimulus funds. Prominent economists, including Larry Summers and Oliver Blanchard, who are often aligned with Democratic policies, had cautioned that such substantial deficit spending, particularly during a period of economic recovery from pandemic-related lockdowns, could lead to a sharp increase in inflation.
Since taking office, the cumulative rise in the consumer price index stands at 18.94 percent, translating to an annual average inflation rate of over six percent, which is triple the Fed’s inflation target. For comparison, during the equivalent period under President Trump, the CPI saw an overall increase of 5.96 percent, averaging just under two percent per year.
These figures challenge Joe Biden’s assertion that inflation was “skyrocketing” at the onset of his presidency, suggesting that the significant rise in inflation occurred after the enactment of his administration’s relief measures.