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• From July through November 2022, monthly wage increases exceeded monthly inflation increases.
• Inflation remains high by historical standards, and the comparison of current wages and inflation with their 2021 levels shows inflation increasing more aggressively than wages.
On Dec. 13, President Joe Biden touted good news: The nation’s inflation rate had ticked down from 7.8% in October to 7.1% in November, according to the just-released Consumer Price Index.
That was still higher than the Federal Reserve target of 2%, but inflation had risen to as high as 9% as recently as June, so Biden took this news as a sign that things are moving in the right direction.
"Prices of things like televisions and toys are going down, and it’s good news for the holiday season," Biden said while addressing reporters at the White House. "Used car prices fell for the fifth month in a row. New car prices didn’t go up this month."
Biden acknowledged that inflation was still too high and more needed to be done, then continued, "For the last several months, wages have gone up more than prices have gone up."
Biden is largely correct, though his statement needs some context.
The White House told PolitiFact that Biden was referring to month-to-month changes using standard metrics. For the inflation rate, he used the Consumer Price Index; for wages, he used average hourly earnings for all private-sector employees.
In July, August, September, October and November 2022, monthly wage increases exceeded monthly inflation increases, albeit narrowly in September and October.
The past five months represented a change compared with the period that preceded it, from October 2021 to June 2022. During all but one of those months, the increase in the month-to-month inflation rate exceeded the increase in the month-to-month wage rate. (The only exception was April 2022, when wages increased by slightly more than inflation.)
"The president’s description of recent wage and consumer price data seems to me strictly accurate," said Gary Burtless, a economist at the Brookings Institution, a Washington, D.C.-based think tank.
It’s worth noting, though, that using a different metric produces a different result.
Another way to express changes in inflation is to compare the current month’s measurement to that same month a year earlier. Using this measure for inflation and wages shows that inflation has been running hotter than wages for most of Biden’s nearly two years in office. The recent decline has brought the two figures closer than they’ve been since early 2022.
Still, Biden phrased his assertion carefully, referring to month-to-month changes.
Biden said, "For the last several months, wages have gone up more than prices have gone up."
He’s correct that in July, August, September, October and November 2022, monthly wage increases exceeded monthly inflation increases, though narrowly for two of those months.
However, inflation remains high historically, as reflected by the year-over-year comparison, which shows inflation increasing more aggressively than wages this year compared with 2021.
The statement is accurate but needs clarification. We rate it Mostly True.
White House, "Remarks by President Biden on the Administration’s Efforts to Tackle Inflation," Dec. 13, 2022
Federal Reserve Bank of St. Louis, Consumer Price Index, accessed Dec. 13, 2022
Federal Reserve Bank of St. Louis, average hourly earnings for all private-sector employees, accessed Dec. 13, 2022
Email interview with Gary Burtless, senior fellow at the Brookings Institution, Dec. 13, 2022
Email interview with Dean Baker, co-founder of the Center for Economic and Policy Research, Dec. 13, 2022
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