President Joe Biden took a victory lap on Wednesday with the latest inflation report, which found consumer prices did not rise above their April levels in May. This marks the first time since 2022 that monthly inflation in the US has remained unchanged.
“Prices are still too high, but today’s report shows welcome progress in reducing inflation,” Biden said in a statement.
The other good news for consumers from the federal Bureau of Labor Statistics report was that annual inflation fell to 3.3% in May, compared to 3.4% in April and 3.5% in March.
The numbers were also weaker than economists had expected: those surveyed by Dow Jones had predicted a price increase of 0.1% and an annual inflation rate 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 that many families feel pressured by the cost of living, which is still too high,” he added.
Combination image depicting former US President Donald Trump attending the Trump Organization’s civil fraud trial in the Supreme Court of the State of New York in the Manhattan borough of New York City, USA, on November 6, 2023 and the attendance of US President Joe Biden at a meeting with Italian Prime Minister Giorgia Meloni shows in the Oval Office at the White House in Washington, USA, March 1, 2024.
Reuters
Five months before the November election, cooling inflation data is good news for Biden as he launches a re-election campaign based on the argument that his administration has revived the economy from the chaos caused by the pandemic.
Last Friday, Biden also praised himself for a blockbuster jobs report that 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 take on former President Donald Trump’s economic agenda.
“Republicans are taking a different approach that cuts taxes on the wealthy and big corporations, allows special interests like Big Pharma and Big Oil to keep prices high, and “stimulates” inflation by imposing blanket tariffs,” Biden said in his statement.
The Trump campaign did not immediately respond to a request for comment on Biden’s claim that the former president’s economic plan would increase inflation.
Trump has so far laid out an economic platform based on imposing tariffs on all imports, extending his first tax cuts and pressuring the Fed to cut interest rates – all of which economists say would likely drive up inflation.
“Joe Biden inherited an economy from Donald Trump that is teetering on the brink,” Biden campaign spokesman James Singer said, adding that the president “is now leading the great American comeback.”
The timing of the consumer price index release on Wednesday was also significant. The Federal Open Market Committee, which sets interest rates, has been meeting for two days to discuss whether or not to cut interest rates.
Federal Reserve Chairman Jerome Powell will address the media later in the day. The growing consensus among analysts is that the Fed will keep interest rates unchanged for now, but the likelihood of a rate cut in September is increasing.
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2024-06-12 15:12:00
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