State of Uncertainty

President Biden used his State of the Union speech to portray the U.S. as a country in recovery, and he is right that there has been a lot of good news lately.

Price increases have slowed. Covid deaths are down about 80 percent compared with a year ago. Ukraine is holding off Russia’s invasion. Congress passed legislation addressing climate change, infrastructure and gun violence, and some of it was bipartisan.

What Biden did not emphasize last night was that the U.S. also faces a lot of uncertainty. Depending on what happens over the next few months, the current moment may end up looking like a temporary high point for the country and Biden’s presidency — or another step toward better times. Today’s newsletter provides a fuller picture of the state of the union, looking at four topics that will shape 2023.

After those four, we will also give you the highlights from Biden’s speech and reactions to it.

Republican House

Biden spent much of his speech celebrating bipartisan accomplishments from the last year, including funding for scientific research, electoral overhaul and same-sex marriage protections. “We’re often told that Democrats and Republicans can’t work together,” Biden said. “But over the past two years, we’ve proved the cynics and naysayers wrong.”

But that bipartisanship was before Republicans took control of the House, and they have been clear that they intend to stifle Biden’s presidency. They have already started investigations into his son’s business dealings and the influx of migrants at the U.S.-Mexico border.

The biggest source of uncertainty is the clashes Republicans have promised over spending. Those fights could lead to government shutdowns or, worse, financial calamity if Congress fails to increase the nation’s debt limit.

Inflation

The rate at which prices have been rising — inflation — has now cooled for six straight months.

But inflation is still high. America’s central bank, the Federal Reserve, targets an annual rate of roughly 2 percent, and its preferred inflation measure is still closer to 5 percent.

The labor market also remains very hot, with last week’s jobs report putting the unemployment rate at its lowest level since 1969. A historically low unemployment rate is normally good news. But in an economy with high inflation, a tight labor market can lead to even higher prices. The Federal Reserve could respond by trying to slow the economy further, which could cause a recession.

War in Ukraine

Ukraine has done much better in its fight against Russia than most analysts expected.

But will Ukraine continue to hold out? It is a genuinely open question. Russia has redoubled its efforts, drafting hundreds of thousands of men to the battlefield over the last few months. Vladimir Putin’s forces are planning a renewed offensive in eastern Ukraine, where the fighting has become particularly bloody as Russia tries to take the city of Bakhmut.

Ukraine has defied expectations so far, and could continue doing so. But if Ukraine falls, it would signal to the world that autocrats can get away with invading democratic countries. It would suggest the Western alliance isn’t as powerful as it once was — shifting global power away from democracies like the U.S. and members of the E.U. and toward authoritarian powers like Russia and China. And for Biden, it could damage his standing domestically and globally, much as America’s messy exit from Afghanistan did.

Crime trends

Murders quickly spiked over 2020 and 2021, spawning fears of a new national crime wave. Then good news came in 2022: Murders declined by 5 percent in the country’s largest cities.

But as experts often say, one year does not make a trend. Murder rates are still about 30 percent higher than they were in 2019. Other kinds of crime, including robberies and thefts, increased last year.

The crime data speak to the uncertainty the U.S. faces on all of these topics: The trends are good, but not good enough to fully reverse the problems of recent years.

“An iconic figure”: Respect for James among the league, players and fans is nearly unanimous.

Contemplation: The Packers quarterback Aaron Rodgers will contemplate his football future at a “darkness retreat,” during which he will sit in a small house and meditate.

ARTS AND IDEAS

New York’s new maestro

Gustavo Dudamel will be the next music director of the New York Philharmonic. Dudamel was born in Venezuela and took over the Los Angeles Philharmonic when he was 26. When he arrives in New York in 2026, he’ll oversee an ensemble associated with famous maestros like Leonard Bernstein and Arturo Toscanini.

Dudamel is the rare classical artist to break into the mainstream. He has appeared in a Super Bowl halftime show and was an inspiration for the Amazon series “Mozart in the Jungle.”

For more: The Philharmonic hopes Dudamel can help recapture the populist glamour of the Bernstein era, Zachary Woolfe writes.

PLAY, WATCH, EAT

What to Cook