Higher-than-expected inflation in August was unwelcome news for President Biden, who has been trying to defuse Republicans’ attacks on rising prices in the run-up to November’s midterm elections.
Mr. Biden and his associates have celebrated falling gasoline prices daily all summer. They have helped inflation fall from its peak earlier this year, but not enough to offset last month’s rising rent, food and other prices.
While acknowledging the pain of rapid price hikes across the economy, Mr. Biden has made strides in the fight against inflation, including signing an energy, health care and tax bill last month that Democrats dubbed the Inflation Reduction Act. On Tuesday, he tried to give a positive glow to the August data, calling them a sign of “more progress” in pushing inflation back.
“Overall,” Mr Biden said in a White House statement, “prices in our country have been essentially flat for the past two months: That’s welcome news for American families, there’s still more work to be done. “
But polls continue to show inflation is hurting Mr Biden and his party as Democrats try to maintain control of the House and Senate. It looms as the top issue for voters in national polls, and Americans say they trust Republicans more to tackle inflation and the economy in general than Democrats.
There are signs of hope for government officials, both among consumers and businesses. The National Federation of Independent Business reported Tuesday that the Small Business Optimism Index rose in August as inflation fears eased, continuing a recovery from the depths earlier this year. The Federal Reserve Bank of New York reported on Monday that consumer inflation expectations were also falling.
Administration officials and the Federal Reserve say strong job growth and consumer spending this summer have allayed fears the country may slip into recession in the first half of the year.
The president sees those developments as signs that his policies are working to help the country through a turbulent time in the global economy, and is trying to take credit.
Mr Biden will hold a belated celebration on Tuesday to mark his signing of the Inflation Reduction Act at the White House. Biden is expected to criticize Republicans for voting unanimously against the bill. On Wednesday, Mr. Biden will fly to the Detroit Auto Show to defend his policy of boosting production and low-emission energy sources.
But the country’s economic realities remain more confused, as the inflation report underlined. Food prices continue to rise, especially for lower-income families. A possible rail strike could disrupt domestic supply chains. The global economy is slowing sharply and the US recovery is still under threat as European sanctions drive millions of barrels of Russian oil from the global market in the coming months.
Most importantly — and arguably most damaging to Mr. Biden and Democrats — U.S. wages have struggled to keep pace with rapidly rising prices, an inconvenient truth for a president who promised to put real wage increases at the heart of his economy. program. Inflation-adjusted average hourly wage The economy rose in August, the Labor Department said Tuesday, but remains nearly 3 percent lower than a year ago.
Republicans were quick to criticize Mr Biden after Tuesday’s report. “Every day, Americans are going through Biden’s economic crisis,” said Missouri Representative Blaine Luetkemeyer, the top Republican on the small business committee. “Democrats’ inflation continues to drive up costs and lead more and more small businesses and families to question their future.”