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There’s rarely a good time for prices to rise a lot. Good luck finding someone who will tell you they enjoy it when their hard-earned dollars can’t stretch as far.
But, if you’re President Joe Biden, now is a particularly bad time for inflation to reaccelerate. Just as he was starting to get better marks on the economy after months of negative feedback from voters, inflation soared to the highest level in six months, according to a Bureau of Labor Statistics report issued Wednesday.
Prices were up 3.5% for the year in March, a jump from February’s 3.1% annual inflation rate, the Consumer Price Index report showed.
Even though the economy’s been performing well by many metrics, Biden’s learning the hard way that good data — no matter how strong — does little to change how people feel about the economy. On the other hand, bad economic data, especially regarding inflation, almost certainly guarantees people aren’t going to be feeling better about the economy.
But people don’t need to parse through monthly inflation reports to know prices are up. Just look at any gas station sign or the heating bill for your home — if you can even afford one.
Significant progress over the past two years in getting inflation down from multi-decade highs has been of little help to struggling Americans. All that means is the rate of price increases has slowed but the actual prices we’re paying are still higher than they were in prior years.
Since Biden took office three years ago, prices are up 19%, according to CPI data. That hasn’t won him many fans. Even his former chief of staff, Ron Klain, criticized Biden for not doing enough on inflation and “talking too much about bridges” while egg and milk prices are rising, according to audio obtained by Politico.
Biden was quick to respond with optimism in a statement Wednesday morning.
“We have more to do to lower costs for hardworking families,” he said. Then, like any politician would try to do, he highlighted two areas where prices are lower than they were a year ago: eggs and milk (though both are starting to rise again as bird flu spreads). Gas used to be his go-to, but after Wednesday’s report, he can no longer say prices are lower now than they were a year ago, as OPEC supply cuts and a switch to summer fuels sends prices marching toward $4 a gallon.
Biden on Wednesday highlighted his legislative achievements and executive actions that have curbed costs as part of his plan to get price increases back to tolerable pre-pandemic levels.
“My agenda is lowering costs for prescription drugs, health care, student debt, and hidden junk fees,” he said in the statement. Even though many life-saving drugs are vastly unaffordable to people who need them most, drug prices on the whole are only up 0.4% year-over-year. Health insurance costs, meanwhile, are down 15%.
But canceling more student debt, as popular as it may be with Gen Z voters in particular, could prove to be inflationary. And the whole junk fee battle sounds good on paper but is legally complicated. Corporations don’t love being told to get rid of easy revenue streams and have tried to fight Biden on it. Similarly, he said he’s “calling on corporations including grocery retailers to use record profits to reduce prices.” If only it was that easy.
A White House spokesperson told CNN Biden is “focused on lowering the costs that matter to hardworking families.” The spokesperson, like Biden, lambasted Republican lawmakers, saying they have “no plan to lower inflation.”
But to his credit, Biden acknowledged one of the main drivers of inflation: housing costs. The shelter index, a broader component of the inflation report that covers a majority of housing expenses, is up 5.7% year-over-year. That alone accounted for 60% of the overall annual rise in prices last month.
Part of the reason housing is more expensive is there’s a shortage. So Biden’s proposal to build and renovate more than 2 million could help. But it’s unlikely to happen before November.
