Biden Promises Inflation Will 'Ease Substantially' by End of 2022 as CPI Hits 40-Year High
13:48 GMT 10.02.2022 (Updated: 16:19 GMT 10.02.2022)
Two years of spendthrift government policy aimed at tackling the economic crisis sparked by coronavirus lockdowns, combined with a gargantuan $30 trillion federal debt and an ambitious infrastructure, social and climate spending agenda by the Biden administration, have been blamed for a rise in the consumer price index unseen in four decades.
The US inflation rate hit an annualised rate of 7.5 percent over the past 12 months, its biggest rise since February 1982, Consumer Price Index (CPI) figures released by the Department of Labour on Thursday show.
Data showed that prices rose by 0.6 percent in January alone, the same rate as December, with housing, used vehicles, food, furniture and medical expenses all affected. The January inflation rate proved higher than expected amid Federal Reserve plans to raise interest rates in March.
Economists have blamed the inflation bonanza on factors ranging from Covid bailouts and multi-trillion dollar federal spending plans to shortages of goods and workers caused by global supply chain disruptions and large-scale walkouts, combined with better-than-expected consumer spending numbers and a spike in wages in some industries.
The inflation bump has hit everything from the price of meat at the grocery store to lumber for housing, gasoline, child care and other costs, and is believed to have played a major role in explaining President Biden's historically low approval ratings one year into his term.
President Joe Biden issued a press statement later on Thursday regarding the CPI report, saying that his administration has "been using every tool at our disposal" to deal with the issue. "And while today is a reminder that Americans' budgets are being stretched in ways that create real stress at the kitchen table, there are also signs that we will make it through this challenge," he said.
"While today's report is elevated, forecasters continue to project inflation easing substantially by the end of 2022. And fortunately we saw positive real wage growth last month, and moderation in auto prices, which have made up about a quarter of headline inflation over the last year," Biden said.
Republican National Committee chairwoman Ronna McDaniel also commented on the CPI report, saying in a press statement that "Americans pay more and earn less because of Joe Biden's failed agenda."
"Biden lied – his inflation is not 'transitory' – and hardworking Americans are facing the consequences as skyrocketing prices for nearly everything are here to stay. Yet Biden doesn't care," McDaniel suggested.
The United States isn't alone among countries suffering higher-than-normal inflation rates, with the Organisation for Economic Cooperation and Development recently reporting its highest CPI increase in a quarter of a century, with developing countries including Russia and Brazil also suffering high single-digit or low double-digit inflation during the same period. Among major economies, China alone seems to have somehow beaten the inflation burden, reporting a CPI increase of just 1.5 percent year-on-year in December, down from 2.3 percent a month earlier.
19 January 2022, 10:20 GMT
The US and countries around the world pumped trillions of dollars into their economies after instituting national lockdowns to try to 'flatten the curve' of the coronavirus in 2020 and 2021. However, a worrying study put out by the Johns Hopkins Institute of Applied Economics late last month revealed that these restrictions had almost no impact on Covid mortality, but did have a "devastating" economic effect and sparked a wide range of social problems, from a spike in suicides and substance abuse issues to a lack of planned medical care for those suffering from non-Covid-related maladies.