Have incomes outpaced inflation since Joe Biden took office?

President Joe Biden responded to a worse-than-expected July jobs report by seeking to portray his overall economic stewardship as positive.

"Since Vice President Harris and I took office, our economy has created nearly 16 million jobs, average unemployment has been lower than during any administration in 50 years, and incomes have risen faster than prices," Biden said in an Aug. 2 statement.

He’s right about the total number of jobs created on his presidency; they are up by 15.8 million since Biden’s inauguration. And his statement underplayed his accomplishment on average unemployment, which has averaged 4.16% during his tenure. Since the 1950s, the only other president to come close on average unemployment was Lyndon B. Johnson with 4.19%.

But what about Biden’s third point, the comparison of income with prices — an issue of intense importance to Americans, who are still feeling aftershocks of the roughly 9% annual inflation peak in summer 2022?

It’s largely right. Let’s sort through the numbers.

Biden said "income," not "wages." These terms have different meanings: Wages count only what people are paid for working; income includes payment for work and earnings from investments and government benefits.

This distinction matters because if Biden had said "wages" had exceeded inflation since he took office, he would have been wrong.

As PolitiFact has noted previously, determining whether wages have exceeded inflation during the Biden presidency depends on when you start measuring. If you look at today compared with the prepandemic period, and if you look at the last year or the last two years, wages have outpaced inflation.

But if you look at Biden’s inauguration until today — the period Biden referred to Aug. 2 — inflation has outpaced wages.

Looking at income alone paints the favorable picture Biden sought to impart.

To evaluate his accuracy, we used personal disposable income per capita. The White House also pointed to this measure when we asked for evidence. Because this statistic is adjusted for inflation, it means Biden’s statement would be correct if the level is higher now than when he took office, which it is.

Making this a fair comparison is complicated. The coronavirus pandemic dramatically affected the economy and distorted economic statistics from that period — particularly income statistics, since Americans received temporary cash stimulus payments. 

Because of the timing of the stimulus checks, the $600 payments per person (including children) were issued in December 2020 and mainly showed up in income data in January 2021. The $1,400 payments per person issued in March 2021 showed up mainly in the March data.

January 2021, Biden’s first month in office, was an anomaly because it saw this temporary influx of stimulus cash. To create a fairer comparison, we decided to use as the baseline for Biden’s tenure either December 2020 or February 2021.

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stated on November 15, 2010 in a letter to Congress.

Since the Fed was created in 1913, "the U.S. Dollar has lost 98% of its purchasing power." 

Using either of these months makes Biden’s statement correct. Inflation-adjusted personal disposable income per capita was $49,407 in December 2020 and $50,017 in February 2021, but by June 2024, the last month available, it had risen to $50,423. (Remember, these figures are already adjusted for inflation.) 

Looking deeper into the data, inflation-adjusted disposable personal income per capita was higher than its December 2020 level in 29 of the 42 months from January 2021 to June 2024, said Gary Burtless, an economist with the Brookings Institution, a Washington-based think tank. That’s a clear majority.

The nonpartisan Congressional Budget Office, meanwhile, examined a different segment of the data, and compared purchasing power in 2019, the last full year before the pandemic, with 2023, the most recent full year with available data. 

In a May 2024 report, the agency concluded that "for households in every quintile (or fifth) of the income distribution, the share of income required to pay for their 2019 consumption bundle decreased, on average, because income grew faster than prices did over that four-year period."  

"The plain fact is that Republicans and Democrats jointly devised fiscal and monetary policies that delivered a rapid recovery from a historically sudden and severe recession in 2020," Burtless said.

Biden said, "Since Vice President Harris and I took office … incomes have risen faster than prices."

If Biden had said "wages," he would have been wrong. Since he took office, wage growth has trailed inflation.

But Biden said "incomes," which are defined differently from wages, and for that, the data backs him up. After adjusting for inflation, per capita personal income after taxes has risen modestly, once you remove the temporary influx of pandemic-era stimulus cash that distorts the data for January 2021, Biden’s first month in office.

The statement is accurate but needs additional information. We rate it Mostly True.