President Joe Biden took a victory lap Wednesday on the latest inflation report, which showed consumer prices did not rise in May from April levels. This is the first time since 2022 that US month-on-month inflation has remained flat.
“Prices are still too high, but today's report shows welcome progress in lowering inflation,” Biden said in a statement.
The federal Bureau of Labor Statistics report also showed that annual inflation fell to 3.3% in May, down from 3.4% in April and 3.5% in March.
The figures also came in cooler than economists had expected, with figures surveyed by Dow Jones predicting a price rise of 0.1% and annual inflation of 3.4%.
“Wages are rising faster than prices, and unemployment has remained at or below 4% for the longest period in 50 years,” Biden said.
“I know many families feel pressured by the cost of living, which is still too high,” he added.
Combination photo of former US President Donald Trump and US President Joe Biden.
Reuters
Five months after the November election, cooling inflation numbers are good news for Biden as he mounts a reelection campaign based on the argument that his administration has revived the economy after the chaos caused by the pandemic.
Last Friday, Biden also patted himself on the back for a blockbuster jobs report, which showed the U.S. economy added 272,000 jobs in May, well above the Dow Jones forecast of 190,000.
Biden also used Wednesday's positive report to tackle former President Donald Trump's economic agenda.
“Republicans have a different approach, one that cuts taxes for the rich and big corporations, allows special interests like Big Pharma and Big Oil to keep prices high, and 'spurs' inflation by imposing across-the-board tariffs,” Biden said. his statement.
The Trump campaign responded to Biden's criticism, stating that the costs are still too high due to the Democratic president's economic policies.
“Workers and families are literally paying the price for Joe Biden's failed economic policies, with prices for household items like gas, food, rent and diapers skyrocketing,” a Trump campaign spokesman said in a statement to CNBC.
Trump has so far laid out an economic platform based on imposing tariffs on all imports, extending his first installment of tax cuts and pressuring the Fed to cut interest rates — all of which economists say are likely to fuel inflation would encourage.
“Joe Biden inherited an economy that was on the brink from Donald Trump,” Biden campaign spokesman James Singer said, adding that the president is “now leading the great American comeback.”
The timing of Wednesday's CPI release was also significant. The interest rate-setting Federal Open Market Committee has been meeting for two days to debate whether or not to cut interest rates.
Fed Chairman Jerome Powell will address the media later in the day. The growing consensus among analysts is that the Fed will leave interest rates unchanged for the time being, but the chances of a rate cut in September are increasing.
