Biden called current U.S. prices "too high"
President Joe Biden’s hopes that the midterm congressional elections would come with lower inflation fell flat Thursday when the last inflation report before the November vote showed that prices rose more than expected over the past month.
The report could hurt Biden and the Democratic Party, which hopes to maintain control of Congress and convince voters deeply concerned about high prices that it is the Democrats who can help lower inflation.
The White House has long been slow to acknowledge the dangers of inflation, and senior administration officials, including Treasury Secretary Janet Yellen, have called inflation “temporary” in 2021, despite warnings from some economists about the risk of continued price increases.
Biden and other administration officials said Thursday that they understood the feelings of American families struggling to pay their bills, while stressing the good labor market situation.
“Americans are suffering because of the [high] cost of living: this has been true for years, and they didn’t need today’s report to know it,” Biden said in a statement.
The consumer price index rose 0.4 percent last month after rising 0.1 percent in August, according to the Labor Department report. The index rose mainly because of higher rents and higher food prices. Over the past 12 months, the consumer price index rose 8.2% as of September. In August, the level was at 8.3 percent.
Biden said the consumer price index shows some progress against inflation, but there is still much work to be done.
The White House noted that inflation has averaged an annualized rate of 2 percent over the past three months, up from 11 percent the previous quarter. The increase then was due to sharp increases in rents and food prices. Expectations are growing that the Federal Reserve will hold a fourth interest rate hike of 75 basis points next month.
“But even with this progress, prices are still too high. Fighting global inflation, which affects countries around the world and working families here at home, is my top priority,” Biden said.
Biden and the Democrats have tried with moderate success to contain the spike in inflation caused by the U.S. economy emerging from the COVID-19 pandemic and the Russian invasion of Ukraine.
The administration worked around the clock to help unload U.S. ports to increase imports of consumer goods and opened the Strategic Petroleum Reserve to release more oil to the market and lower U.S. gasoline prices.
Congress also passed the Biden administration’s “Inflation Reduction Act,” which does not provide immediate relief to American consumers, but will eventually help them save money on medical costs and electric bills, among other things.
“We have policies that will make a difference. We have policies that have already made a difference. We just need to stay the course,” Brian Deese, director of the National Economic Council, said in an interview with CNN today.
“Nearly a year after President Biden promised Americans that inflation was at its peak, core inflation is now the highest in the history of his presidency,” said Republican Kevin Brady, who is deputy to the House Budget Committee, in a statement.