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

• The news comes as Biden struggles with low approval ratings on his handling of the economy.
• Rising real — that is, inflation-adjusted — earnings are a primary indication of improving standards of living, Axios' Matt Phillips writes.

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.

Go deeper: Why Obama, Dems fear Biden complacency