A new Labor Department report made two things official on Friday: One, inflation continues to rise under President Joe Biden; and two, it is now at its highest level in four decades.
The department said inflation rose from 6.2 percent in October to 6.8 percent last month, the highest level since 1982, in what is sure to add new headaches for a president — and a vice president — who are already underwater in terms of approval ratings, and sinking fast.
The Consumer Price Index, or CPI, which is the Labor Department’s most closely-watched inflation measure, rose briskly in November due in large part to continued supply chain problems and shortages among retailers, wholesalers, and other distributors.
The Hill reported that several economists had predicted a 0.7 percent rise in the CPI month-to-month in November after inflation hit 6.2 percent in October, the highest figure in 30 years. November’s figure of 6.8 percent is the highest since midway through President Ronald Reagan’s first term in 1982.
The worsening CPI is bound to have even more negative effects on President Biden and Democrats generally. Several recent surveys have shown that Americans’ top concern is the economy and rising prices, which Republicans have said serve as an additional tax on earners.
That said, the administration has attempted to downplay the issue by highlighting a number of other economic factors as the U.S. economy continues its recovery from COVID-19-related shutdowns and restrictions. The administration has noted that hiring picked up last month, bringing unemployment to a post-pandemic low of 4.2 percent as well as touting its $1.9 trillion coronavirus stimulus package that Biden signed in March.
Consumer spending has also risen above pre-pandemic levels, notes The Hill, the stock market is continuing to climb, and wages have grown.
Still, rising prices are putting a crimp in household budgets in ways unseen in decades, wiping out many of those gains and taking a toll on Americans least able to afford the increases.
“Economic growth is stronger here than virtually any other nation. Americans have more money in their pockets than this time last year – $100 more each month than last year – even after accounting for price increases. But we have to get prices and costs down before consumers will feel confident in that recovery. That is a top goal of my administration,” Biden noted in a Friday statement.
The Labor Dept. noted that prices rose broadly across the economy, with food, gasoline, and shelter leading the increases. Earlier this year, inflation was being driven nearly entirely by rising prices for vehicles, electronics, and other goods that are dependent on computer chips, which are still in short supply.
Some economists are predicting that price increases will continue for the next several months at least.
“Whatever happened to the core CPI month-to-month in November, the upward pressure on the year-over-year will persist through March, at least, because base effects are very unfavorable,” Ian Shepherdson, chief economist at Pantheon Macroeconomics, noted in a Friday analysis seen by The Hill.
“Nothing is certain in the COVID world, but a higher core inflation rate over the next few months looks like a safe bet,” he added.
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