When President Joe Biden signed America’s bailout plan in March 2021, US gross domestic product was up three straight quarters and the unemployment rate was down almost nine percentage points from its pandemic peak.
At a Sept. 13 fundraising reception, Biden falsely credited the Democratic COVID-19 Relief Act, enacted in the early months of his term, with saving a “declining” U.S. economy. Economists told FactCheck.org that the weakened economy was actually “growing,” albeit “more slowly,” before the legislation went into effect.
Also, the unemployment rate was 3.7% in August, up 0.2 percentage points from 3.5% in July – the lowest since February 2020, when it was also 3.5%.
But in White House remarks the same day, Biden misleadingly claimed that the unemployment rate last month was “almost a 50-year low in our country.”
Biden spoke at a reception hosted by the Democratic National Committee on the US recovery from the economic meltdown caused by COVID-19. According to a transcript of his remarks at the White House, the President said, “I stood by what I said out of the American bailout plan, which I passed in February without a single Republican vote, which literally has the economy of.” one in decline turns into one in recovery.”
The final version of America’s bailout plan passed the House and Senate in early March 2021, and Biden signed it into law on March 11. Only Democrats and Independents voted in favor of the legislation, which included an estimated $1.8 trillion in additional spending to support the country’s economic recovery, e.g. B. $1,400 in direct payments to eligible individuals.
The rescue plan, or ARP, followed two other major relief acts, the $1.7 trillion Coronavirus Aid, Relief, and Economic Security Act and about $900 billion for COVID-19 in the Consolidated Appropriations Act — both under the enacted by former President Donald Trump in 2020. These earlier legislative efforts had already helped ignite the country’s economic comeback by the time Biden took office.
By the time the ARP became law, the economy had certainly not recovered to pre-pandemic levels. It was still struggling, but the country’s fiscal status was improving, contrary to what Biden claimed.
For example, after two quarters of economic contraction early in the pandemic, the US Bureau of Economic Analysis estimated that real GDP grew 33.8% in the third quarter of 2020, 4.5% in the fourth quarter and 6.3% in the first quarter of 2021.
Additionally, the unemployment rate, which hit a pandemic high of 14.7% in April 2020, had fallen to 6% in March 2021 after falling for almost 10 straight months.
Several economists also told us that the economy was not in decline.
“The economy, as measured by GDP or other conventional metrics, clearly grew from April 2020 through at least late 2021,” Johns Hopkins University economist Jonathan Wright said in an email. “It was fast at first, then slower. I disagree that the economy was in decline at the time the ARP was passed.”
Steven Fazzari, an economist at Washington University in St. Louis, agreed.
“President Biden’s statement could be drafted more carefully,” he said in an email. “It’s misleading, literally. But I believe the broader implication is largely correct. The economy grew in early 2021, but from a very low base.”
“When the ARP was proposed, the economy had not yet recovered from the collapse of the pandemic,” Fazzari continued. “In the months following the ARP, GDP and employment growth accelerated, accelerating the recovery.”
Wright also said that “ARP boosted the economy,” which he said was “not operating at its full potential at the time.”
The White House has not responded to our questions about Biden’s claim.
At times the government has highlighted a February analysis by Moody’s Analytics on global fiscal policy during the pandemic. That report predicted that without the ARP, the US recovery would have taken longer as the economy would likely have experienced a “double-digit recession” in spring 2021, leading to further increases in unemployment.
“The ARP is responsible for creating well over 4 million more jobs in 2021, and the economy is currently on track to regain all jobs lost to the pandemic by the second quarter of this year,” the report said. “If there hadn’t been an ARP, it would have taken another year for the economy to regain all those jobs.”
The economy reached the point in the third quarter where all the jobs lost to the pandemic could be restored.
Still, Moody’s chief economist Mark Zandi, one of the report’s authors, also told us in an email exchange that Biden’s claim at the DNC event was inaccurate.
“I would not say the economy was in decline at the time the ARP was passed, but I would say the economy was fragile and there was still significant uncertainty about the trajectory of the pandemic and the sustainability of the recovery,” wrote zandi . “The ARP was important to ensure the recovery became a self-sustaining economic expansion.”
The unemployment rate was 3.7% in August, the most recent month for US Bureau of Labor Statistics estimates. That was a fifth of a percentage point from 3.5% in July.
In remarks from the South Lawn of the White House on Sept. 13, Biden made the misleading claim that the August rate was the lowest in nearly five decades.
“Since we took office, we’ve created nearly 10 million jobs — a record for any presidency up to that point — 3.7 percent unemployment, nearly a 50-year low for our country,” the president said. He has made similar claims about the rate before and since.
But the rate was just 3.5% in January and February 2020 — just weeks before the spread of COVID-19 disrupted the global economy. The last time the rate was lower was when it was 3.4% for nine consecutive months between 1968 and 1969.
So the current price is near a two and a half year low.
While the number of jobs created by Biden in the first 20 months — 9.7 million — is the most of any newly-elected president, the percentage of job growth under President Jimmy Carter has been better than the previous increase under Biden.
Since Biden has been president, total nonfarm payrolls have risen about 6.7% from about 143 million jobs in January 2021 to over 152.7 million in August 2022, according to the latest BLS figures. Under Carter, employment grew from about 80.7 million in January 1977 to nearly 87.5 million in August 1978. That’s an increase in employment of about 6.8 million workers, or 8.4%.
As we wrote earlier, comparing percentage increases – rather than raw employment numbers – helps to account for changes in the size of the labor force and the total population over time.
Biden’s claim also fails to acknowledge the unique economic conditions created by COVID-19.
The US economy lost nearly 22 million jobs early in the pandemic as large parts of the economy shut down. By the time Biden took office, over 40% of those jobs hadn’t come back, BLS data shows. So there was a lot of room for growth.
It was only in August that total nonfarm payrolls finally surpassed the pre-pandemic peak of 152.5 million, according to preliminary figures from the BLS.
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