In his recent State of the Union address, President Joe Biden emphasized the positive trends of rising wages and decreasing inflation rates. While acknowledging these improvements, experts caution that many households are still struggling to cope with the rising cost of living.

According to President Biden, "Wages keep going up and inflation keeps coming down." This statement aligns with the gradual decline in the consumer price index, a crucial measure of inflation. The index, which reached a peak of 9.1% during the pandemic in June 2022, has gradually fallen to 3.1% in January.

Mark Hamrick, senior economic analyst at Bankrate.com, agrees that President Biden's statement is factually correct. However, he points out that despite the improvement, inflation has eroded about one-fifth of people's purchasing power, making it challenging to convince individuals that inflation is not a significant concern.

While wage gains and consumer confidence have shown recent improvements, many Americans continue to struggle financially. Skyrocketing prices for everyday items have left individuals living paycheck to paycheck, depleting their savings and forcing them to rely on credit cards to make ends meet. This situation has hit lower-income families particularly hard, exacerbating the financial strain they face.

Tomas Philipson, a professor of public policy studies at the University of Chicago and former acting chair of the White House Council of Economic Advisers, expresses concern about the Biden administration's optimism in light of ongoing economic challenges. He likened the situation to a football team that is down at halftime but scores a field goal, claiming victory prematurely.

Additionally, Sung Won Sohn, a professor of finance and economics at Loyola Marymount University and chief economist at SS Economics, addressed the "last mile problem" in tackling inflation. Even though the inflation rate has not yet fallen below the Federal Reserve's 2% annual target, some economists suggest that curbing inflation further may risk economic growth and potentially lead to a recession. Sohn believes that much of the inflation rate decline in the past was due to the easing of supply bottlenecks, which are no longer a significant factor.

While President Biden highlights positive economic trends, it is essential to recognize the challenges still faced by many households. The rising cost of living continues to strain individuals and families across the United States, and experts stress the need for sustainable efforts to alleviate financial burdens and ensure long-term economic stability.