President Joe Biden reacted to today’s release of the June Consumer Price Index—which found a 9.1% year-over-year increase in inflation—by releasing a statement saying the data is “out of date” while also outlining the steps he plans to take to bring price increases under control.
“Today’s data does not reflect the full impact of nearly 30 days of decreases in gas prices, that have reduced the price at the pump by about 40 cents since mid-June.”
President Joe Biden
“While today’s headline inflation reading is unacceptably high, it is also out of date,” President Biden said. “Energy alone comprised nearly half of the monthly increase in inflation. Today’s data does not reflect the full impact of nearly 30 days of decreases in gas prices, that have reduced the price at the pump by about 40 cents since mid-June. Those savings are providing important breathing room for American families. And, other commodities like wheat have fallen sharply since this report.”
The Consumer Price Index for All Urban Consumers (CPI-U) increased 1.3% in June on a seasonally adjusted basis after rising 1.0% in May, the U.S. Bureau of Labor Statistics reported today. Over the last 12 months, the all-items index increased 9.1% percent before seasonal adjustment.
As President Biden alluded to, the energy index rose 7.5% over the month and contributed nearly half of the all-items increase, with the gasoline index rising 11.2% and the other major component indexes also rising. The increase was broad-based, with the indexes for gasoline, shelter, and food being the largest contributors. The food index rose 1.0% in June, as did the food at home index.
“Importantly, today’s report shows that what economists call annual ‘core inflation’ came down for the third month in a row, and is the first month since last year where the annual ‘core’ inflation rate is below 6%,” Biden’s statement said.
“Inflation is our most pressing economic challenge. It is hitting almost every country in the world. It is little comfort to Americans to know that inflation is also high in Europe, and higher in many countries there than in America. But it is a reminder that all major economies are battling this COVID-related challenge, made worse by Putin’s unconscionable aggression,” he continued.
Today’s June inflation report also triggered a significant bump in the estimated 2023 Social Security cost of living adjustment (COLA), which The Senior Citizens League now forecasts at 10.5% after holding steady at 8.6% for the previous two months. Were the estimate to hold true, it would be the third-largest COLA in Social Security’s history, and the largest since 1981.
Next year’s COLA—which won’t be officially determined until inflation rates are tracked in July, August, and September—could fall back into single-digit territory if inflation were to moderate in the coming months.
Biden said Wednesday that tackling inflation is his top priority. “We need to make more progress, more quickly, in getting price increases under control,” he said, before outlining what he plans to do:
• “First, I will continue to do everything I can to bring down the price of gas. I will continue my historic release of oil from our strategic petroleum reserve. I will continue working with our European allies to put a price cap on Russian oil—sapping Putin of oil revenue. And, I will continue to work with the U.S. oil and gas industry to increase production responsibly—already, the U.S. is producing 12.1 million barrels of oil per day and is on track to break records.
“But I will also continue to insist—as I have with urgency recently—that reductions in the price of oil must produce lower gas prices for consumers at the pump. The price of oil is down about 20% since mid-June, but the price of gas has so far only fallen half as much. Oil and gas companies must not use this moment as an excuse for profiting by not passing along savings at the pump.”
• “Second, I will urge Congress to act, this month, on legislation to reduce the cost of everyday expenses that are hitting American families, from prescription drugs to utility bills to health insurance premiums and to make more in America.”
• “Third, I will continue to oppose any efforts by Republicans—as they have proposed during this campaign year—to make things worse by raising taxes on working people, or putting Social Security and Medicare on the chopping block every five years.”
• “Finally, I will continue to give the Federal Reserve the room it needs to help it combat inflation.”
Many economists are predicting that today’s CPI report will prompt the Federal Reserve to raise its key interest rate by three-quarters of a percentage point for a second straight month later this month. Last Friday’s jobs report was another step towards such a move because it showed strong employment gains of 372,000 and a big drop in the number of Americans looking for jobs.
SEE ALSO:
• High June Inflation Leads to Double-Digit Social Security COLA Prediction
• McConnell: Scott’s ’11-Point Plan to Rescue America’ DOA on His Watch
• You Won’t Believe the Size of This 2023 Social Security COLA Estimate
• The Impact of (More) Inflation on 401k Investments