The Biden administration is seeking to reassure Americans regarding rising inflation, after the Labor Department’s Consumer Price Index (CPI) report showed prices rising at their fastest annual pace in nearly 40 years.
The White House is facing criticism after the report showed that consumer prices rose 6.8 percent in the year through November, the sharpest annual increase since 1982, and an acceleration compared to October’s 6.2 percent rate of inflation.
This has given President Joe Biden’s Republican opponents a further reason to criticize his administration’s massive spending agenda, which has weighed on his low approval ratings in recent months.
“Inflation has jumped to 6.8 percent and the Biden–Harris White House still continues to push policies that will drive up inflation even higher,” Sen. Ted Cruz (R-Texas) wrote in a tweet.
“Prices keep rising and all Democrats want to do is spend trillions more in taxpayer money. Democrats created the inflation crisis crushing American families and are too incompetent to fix it,” said Michael McAdams, National Republican Congressional Committee communications director.
“Today’s numbers reflect the pressures that economies around the world are facing as we emerge from a global pandemic—prices are rising. But developments in the weeks after these data were collected last month show that price and cost increase are slowing, although not as quickly as we’d like,” said Biden in a Dec. 10 press statement.
Biden said that the rise in energy costs and other key goods were starting to ease, and that he expects “more progress on that in the weeks ahead.”
The president said in a previous statement that the numbers do “not reflect the expected price decreases in the weeks and months ahead, such as in the auto market.”
Biden has insisted that his $1.8 trillion Build Back Better government spending plan would help lower costs.
Republicans warn that Biden’s spending bill, which is passing in a Congress narrowly controlled by the Democrats, would fuel inflation even more, hurting his party’s chances in the 2022 midterms.
Prices have risen across the United States due to a variety of factors, including an international supply bottleneck and a labor crunch that has hit a rising demand in production, which is recovering from the pandemic.
Anticipating the CPI report, National Economic Council director Brian Deese, at a White House press conference on Dec. 9, declined to predict inflation forecasts for 2022 and backed the president’s agenda.
“Most outside independent forecasters continue to see price increases moderating, and moderating meaningfully, over the course of next year,” said Deese.
He instead touted recent numbers from the administration showing the lowest drop in unemployment insurance filings since 1969, improved labor force participation, and that American families are seeing “their household income increase, even accounting for price increases.”
Deese said that 20 U.S. states have gasoline prices below the 20-year average, with a 9 cent drop in average gas prices, and that other states would follow in the coming weeks. A “very dramatic decline” in natural gas prices would also help ahead of the winter heating season, he said. “Those price reductions will not be reflected in the data for November.”
He also noted a decline in costs for shipping and certain commodities, as well as a drop in wholesale used car prices that should push consumer prices lower.
Federal Reserve Chair Jerome Powell recently stated to Congress that the U.S. central bank needed to be ready to respond to the possibility that inflation may not recede in the second half of next year, as most forecasters currently expect.
Powell has also said that it may be appropriate to speed up the central bank’s asset-purchase tapering program in the face of rising price pressures.