section_path: Presidency (2021–2025)/Domestic policy/Economic policy
section_name: Economic policy
paragraph_text: Economic policy
  
  Biden entered office nine months into a recovery from the COVID-19 recession and his first year in office was characterized by robust growth in real GDP, employment, wages, and stock market returns, amid significantly elevated inflation. Real GDP grew 5.9%, the fastest rate in 37 years. Amid record job creation, the unemployment rate fell at the fastest pace on record during the year. By the end of 2021, inflation rates measured by the consumer price index (CPI) reached a nearly 40-year high of 7.1%, which was partially offset by the highest nominal wage and salary growth in at least 20 years. The inflation rate peaked at 9% in June 2022. The inflation rate reached 2.9% and core inflation rate reached 3.2% on an annual basis in December 2024, the last full month of Biden's term. Between December 2020 and December 2024, CPI rose 21.3% overall, with an annualized inflation rate of 5.3% throughout Biden's term in office. The inflation rate remained above the Federal Reserve's 2% target every month since March 2021, resulting in elevated interest rates to combat inflation. Average wages increased 19% throughout Biden's presidency, falling behind inflation. The unemployment rate declined by over 2% and real GDP grew 11% during Biden's term. Total household net worth increased by 28%, largely driven by stocks and real estate. The national debt grew to $36.2 trillion, with a debt to GDP ratio of 123% and a deficit to GDP ratio of 6% in FY 2024.
  
  Amid a surge in inflation and high gas prices, Biden's approval ratings declined, with his disapproval rating surpassing his approval rating in early 2022. After 5.9% growth in 2021, real GDP growth cooled in 2022 to 2.1%, after slightly negative growth in the first half spurred recession concerns. Job creation and consumer spending remained strong through the year, as the unemployment rate fell to match a 53-year low of 3.5% in December. Inflation peaked at 9.1% in June before easing to 3.2% by October 2023. Stocks had had their worst year since 2008 before recovering. Widespread predictions of an imminent recession did not materialize in 2022 or 2023, and by late 2023 indicators showed sharply lower inflation with economic acceleration. GDP growth hit 4.9% in the third quarter of 2023 and the year ended with stocks near record highs, with robust holiday spending.
  
  Biden signed numerous major pieces of economic legislation in the 117th Congress, including the American Rescue Plan, Infrastructure Investment and Jobs Act, CHIPS and Science Act, and the Inflation Reduction Act. He signed the CHIPS and Science Act into law on August 9, 2022. It provided billions of dollars in new funding to boost domestic research on and manufacture of semiconductors, to compete economically with China. In his third month in office, Biden also signed an executive order to increase the minimum wage for federal contractors to $15 per hour. The order went into effect for 390,000 workers in January 2022. His administration rigorously enforced antitrust law.
  
  In 2022, Biden blocked a national railroad strike planned by multiple labor unions. During the United Auto Workers strike, he expressed support for the workers in negotiations. Biden joined striking UAW workers' picket line in Michigan, becoming the first president to join a picket line. He refused to block a port strike from the International Longshoremen's Association in October 2024.
  
  Over the course of five days in March 2023, three small- to mid-size U.S. banks failed, triggering a sharp decline in global bank stock prices and swift response by regulators to prevent potential global contagion. After Silicon Valley Bank collapsed, the first to do so, Biden expressed opposition to a bailout by taxpayers. He claimed that the partial rollback of Dodd-Frank regulations contributed to the bank's failure.
  
  At the beginning of the 118th Congress, Biden and congressional Republicans engaged in a standoff after the U.S. hit its debt limit, which raised the risk that the U.S. would default on its debt. Biden and House speaker Kevin McCarthy struck a deal to raise the debt limit, the Fiscal Responsibility Act of 2023, which suspended the debt limit until January 2025. Biden signed it on June 3, averting a default. The deal was generally seen as favorable to Biden.
  
  Biden extended the COVID-19 student loan pause through September 2023, with an "on ramp" period that extended some of the pause's protections against credit reporting, collection efforts, and late payment fees through September 30, 2024. The Biden administration's attempts to implement student loan forgiveness and relief programs have faced legal challenges from a coalition of Republican-led states. Biden's plans to forgive student loan debt were estimated to cost over $519 billion, and some critics called them a "disaster".
  
  Biden entered office nine months into a recovery from the COVID-19 recession and his first year in office was characterized by robust growth in real GDP, employment, wages, and stock market returns, amid significantly elevated inflation. Real GDP grew 5.9%, the fastest rate in 37 years. Amid record job creation, the unemployment rate fell at the fastest pace on record during the year. By the end of 2021, inflation rates measured by the consumer price index (CPI) reached a nearly 40-year high of 7.1%, which was partially offset by the highest nominal wage and salary growth in at least 20 years. The inflation rate peaked at 9% in June 2022. The inflation rate reached 2.9% and core inflation rate reached 3.2% on an annual basis in December 2024, the last full month of Biden's term. Between December 2020 and December 2024, CPI rose 21.3% overall, with an annualized inflation rate of 5.3% throughout Biden's term in office. The inflation rate remained above the Federal Reserve's 2% target every month since March 2021, resulting in elevated interest rates to combat inflation. Average wages increased 19% throughout Biden's presidency, falling behind inflation. The unemployment rate declined by over 2% and real GDP grew 11% during Biden's term. Total household net worth increased by 28%, largely driven by stocks and real estate. The national debt grew to $36.2 trillion, with a debt to GDP ratio of 123% and a deficit to GDP ratio of 6% in FY 2024.
  
  Amid a surge in inflation and high gas prices, Biden's approval ratings declined, with his disapproval rating surpassing his approval rating in early 2022. After 5.9% growth in 2021, real GDP growth cooled in 2022 to 2.1%, after slightly negative growth in the first half spurred recession concerns. Job creation and consumer spending remained strong through the year, as the unemployment rate fell to match a 53-year low of 3.5% in December. Inflation peaked at 9.1% in June before easing to 3.2% by October 2023. Stocks had had their worst year since 2008 before recovering. Widespread predictions of an imminent recession did not materialize in 2022 or 2023, and by late 2023 indicators showed sharply lower inflation with economic acceleration. GDP growth hit 4.9% in the third quarter of 2023 and the year ended with stocks near record highs, with robust holiday spending.
  
  Biden signed numerous major pieces of economic legislation in the 117th Congress, including the American Rescue Plan, Infrastructure Investment and Jobs Act, CHIPS and Science Act, and the Inflation Reduction Act. He signed the CHIPS and Science Act into law on August 9, 2022. It provided billions of dollars in new funding to boost domestic research on and manufacture of semiconductors, to compete economically with China. In his third month in office, Biden also signed an executive order to increase the minimum wage for federal contractors to $15 per hour. The order went into effect for 390,000 workers in January 2022. His administration rigorously enforced antitrust law.
  
  In 2022, Biden blocked a national railroad strike planned by multiple labor unions. During the United Auto Workers strike, he expressed support for the workers in negotiations. Biden joined striking UAW workers' picket line in Michigan, becoming the first president to join a picket line. He refused to block a port strike from the International Longshoremen's Association in October 2024.
  
  Over the course of five days in March 2023, three small- to mid-size U.S. banks failed, triggering a sharp decline in global bank stock prices and swift response by regulators to prevent potential global contagion. After Silicon Valley Bank collapsed, the first to do so, Biden expressed opposition to a bailout by taxpayers. He claimed that the partial rollback of Dodd-Frank regulations contributed to the bank's failure.
  
  At the beginning of the 118th Congress, Biden and congressional Republicans engaged in a standoff after the U.S. hit its debt limit, which raised the risk that the U.S. would default on its debt. Biden and House speaker Kevin McCarthy struck a deal to raise the debt limit, the Fiscal Responsibility Act of 2023, which suspended the debt limit until January 2025. Biden signed it on June 3, averting a default. The deal was generally seen as favorable to Biden.
  
  Biden extended the COVID-19 student loan pause through September 2023, with an "on ramp" period that extended some of the pause's protections against credit reporting, collection efforts, and late payment fees through September 30, 2024. The Biden administration's attempts to implement student loan forgiveness and relief programs have faced legal challenges from a coalition of Republican-led states. Biden's plans to forgive student loan debt were estimated to cost over $519 billion, and some critics called them a "disaster".