The Biden administration is already in claims-control mode ahead of the latest inflation data to be released this week, which is expected to show another stunning figure as the price of everyday goods soared higher.
The Labor Department is releasing the much-anticipated consumer price index report Wednesday morning, which is expected to show prices rising 8.8% in June from the previous year, breaking the previous 40-year high of 8.6% in June. May was overthrown. Monthly, inflation is expected to rise 1%, corresponding to the rate of the previous month.
While White House officials have not suggested that inflation peaked in June, they have argued that record high gas prices are responsible for what will likely be another red-hot CPI reading — though note that pump prices have since have fallen.
“Energy prices have fallen significantly from prices included in the June CPI report,” Brian Deese, the director of the National Economic Council, and Cecilia Rouse, the chair of the Council of Economic Advisers, wrote in a statement. White House memo released Tuesday. † “The June CPI data will largely not reflect the substantial declines in gas prices that we have seen since mid-June.”
TIMES ARE HARD FOR BIDEN’S ECONOMY. HERE IS YOUR RECESSION CHECKLIST
Gas prices peaked at $5.01 per gallon in mid-June and are now hovering around $4.65, according to AAA. That is still about 50% higher than the average fuel costs a year ago. With the drop in gasoline prices, the Biden team argues that June inflation data is “looking backward” because it doesn’t account for the recent drop.
“The June CPI data is already outdated,” White House press secretary Karine Jean-Pierre said Monday.
Economists expect the report to show that so-called core prices, excluding the more volatile readings of food and gasoline, rose 5.8% in June, just below the 6% recorded in May, underscoring how strong inflationary pressures in the economy are still .
Inflation is rapidly diminishing the purchasing power of Americans, eroding the steep wage increases that workers have seen in recent months.
The price hike has also become a political liability for President Biden, who has seen his approval rating fall along with rising costs. Government officials are increasingly trying to contain voters’ outcry over runaway consumer prices by emphasizing that Biden is maximizing his efforts to curb inflation ahead of November’s midterm elections, which could be a bloodbath for Democrats. to be.
The president — who recently said fighting inflation is his “top priority” — blames higher prices on supply chain bottlenecks and other pandemic-induced disruptions in the economy, as well as Russia’s war in Ukraine, while Republicans blame it pinned on The Democrats’ Massive Spending Agenda.
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Most economists now agree that unprecedented levels of government stimulus and a stronger-than-expected recovery from the pandemic have also played a part in exacerbating the inflation crisis.