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The actual state of the economy, after conflicting reports in last night's speeches


President Biden's State of the Union speech and the Republican response offer two very different views on the U.S. economy. Biden sketched a rosy picture on jobs for America, while Arkansas Governor Sarah Huckabee Sanders described a dumpster fire of runaway prices. Neither version is complete by itself, and neither captures Americans' complicated feelings about the economy.

Here to fill in the gaps is NPR's Scott Horsley. Hi, Scott.


SUMMERS: So let's start off with the president. He boasted about low unemployment and a record number of new jobs. And here's some of what Biden had to say.


PRESIDENT JOE BIDEN: Two years ago, the economy was reeling. I stand here tonight after we've created - with the help of many people in this room - 12 million new jobs, more jobs created in two years than any president has created in four years.

SUMMERS: So, Scott, let's do a quick fact check. Are the president's numbers correct?

HORSLEY: The numbers are right, but they do need some context. Job growth has been strong. Last month alone, employers added more than half a million jobs. Unemployment's fallen to its lowest level since 1969. Of course, presidents don't get all the credit for creating jobs. And a lot of that growth reflects the rebound from a very sharp loss of jobs in the early months of the pandemic, a rebound that began before Biden took office. So it's not really accurate for him to say the economy was reeling when he was sworn in. It's true the recovery had temporarily stalled in that winter of 2020, when COVID was raging. The economy actually lost about a quarter million jobs a month before Biden's inauguration, but it quickly regained its footing as vaccines were rolled out, and it's continued a strong comeback ever since.

SUMMERS: As we said, Governor Sanders, who many may remember also served as press secretary for former President Trump, paints a much darker picture of the economy and the culture. Let's hear some of what she had to say last night.


SARAH HUCKABEE SANDERS: In the radical left's America, Washington taxes you and lights your hard-earned money on fire. But you get crushed with high gas prices, empty grocery shelves, and our children are taught to hate one another.

SUMMERS: Let's focus in on the gas and groceries part of that statement for a second. How much are people being crushed by rising prices?

HORSLEY: Inflation is a serious problem. Of course, gasoline prices hit a record high last summer. Overall, inflation topped out about the same time above 9%. In Sanders' telling, that is entirely the fault of Democratic spending bills like the American Rescue Plan. Harvard economist Greg Mankiw, who served in the George W. Bush White House, offered a more nuanced assessment today at the Brookings Institution.


GREG MANKIW: I voted for Joe Biden, by the way, so I'm not here as a partisan. But I thought the American Rescue Plan was too big. Now, I don't think that aggregate demand was a full part of the inflation surge, but I think fiscal policy does deserve some of the blame for the inflation surge.

HORSLEY: Other factors behind inflation, of course, include the pandemic itself, which snarled supply chains, and Russia's invasion of Ukraine.

SUMMERS: And, Scott, looking at polls, they suggest that a lot of people just aren't feeling very good about the economy. Why is that?

HORSLEY: Yeah. A new Gallup Poll shows half of all Americans believe their personal financial situation has gotten worse over the last year, while barely a third say they're better off. Inflation, certainly, a big part of that. More than 6 in 10 lower-income Americans say they're worse off, and lower-income families are particularly hard hit when gas prices go up or rents go up. Wealthier Americans may be unhappy because their stock portfolios took a beating last year. And, of course, worries about a possible recession may be casting a shadow as well.

SUMMERS: How is all of that impacting President Biden's approval rating?

HORSLEY: It's not good. Biden's overall approval rating is in the low to mid-40s. His approval rating on the economy is worse, but there is a chance for a turnaround here. As Biden himself stressed in the speech last night, inflation is coming down.


BIDEN: Here at home, gas prices are down a $1.50 from their peak. Food inflation is coming down - not fast enough, but coming down. Inflation has fallen every month for the last six months while take-home pay has gone up.

HORSLEY: Federal Reserve Chairman Jerome Powell said yesterday he also expects to see significant progress on inflation this year. And as gloomy as many people are about the economy right now, that Gallup Poll does find some optimism about the future. Six in 10 people say they expect to be in better financial shape a year from now. If so, moods could be a lot brighter right around the time of the 2024 election.

SUMMERS: NPR's Scott Horsley - Scott, thank you.

HORSLEY: You're welcome. Transcript provided by NPR, Copyright NPR.

Scott Horsley is NPR's Chief Economics Correspondent. He reports on ups and downs in the national economy as well as fault lines between booming and busting communities.