Jan 8, 2024 - Politics & Policy

Biden's new edge: Allies see opening in rising wages

US President Joe Biden speaks at a podium during an event at the Old Post Office in Chicago, Illinois, US, on Wednesday, June 28, 203, to deliver a major address to outline the theory and practice of "Bidenomics."

President Joe Biden speaks at an event at the Old Post Office in Chicago, Illinois, US, on June 28, 2023, to outline the theory and practice of "Bidenomics." Photo by: Taylor Glascock/Bloomberg via Getty Images

President Biden's allies see an opening: Americans are now getting a real pay boost, even after inflation.

Why it matters: Though the president's broader Bidenomics messaging has fallen flat among some voters, his team sees opportunity in fresh data showing Americans' real earnings are beating inflation once more.

The big picture: Biden's 2024 campaign is counting on voters feeling awesome about the economy by November, Axios co-founders Jim VandeHei and Mike Allen reported in Sunday's "Behind the Curtain."

By the numbers: Average hourly earnings of private sector employees rose at an annual rate of 4.1% last month, per Friday's jobs report.

  • That's slightly higher than the 4% gain in November — and roughly a point above that month's 3.1% rise in annual inflation.

Behind the scenes: Inside the White House, officials are circulating an estimate that it takes about a year for 50% of the pain of inflation to drop out of consumer sentiment.

  • The stat to watch is three-month inflation, since it's less volatile than the monthly figure (because of gas prices). The three-month rate was super high from spring '21 until July '22.
  • It's been more moderate since then — and was really low at the end of '23.

Neil's thought bubble: The inflation rate peaked in the summer of '22. But it came down so slowly that people have kept seeing rising prices since then.

  • But they're rising more slowly, and at levels that (especially recently) wouldn't be alarming in isolation.

Reality check: Between 2021 and 2023, inflation was much higher than earnings, so workers' standards of living fell sharply.

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