President Joe Biden sounded a note of considerable economic optimism on Friday after the inflation metric most utilized by the Federal Reserve continued to increase.
The Personal Consumption Expenditures Price Index rose 5.4% between January 2022 and January 2023, while the version of the measure excluding more volatile food and energy categories rose 4.7% over the same time horizon, according to data from the Bureau of Economic Analysis. Both figures surpassed analysts’ expectations.
Biden responded to the data release by claiming that “we have made progress on inflation, but we have more work to do.” He touted efforts from his administration to reduce prices and said Republicans undermine the strength of the economy by opposing his spending agenda.
“When I travel the country, I see optimism for this year and the years ahead. The optimism of families with just a little bit more breathing room thanks to our work to get workers back into jobs. The optimism of a record number of Americans applying to start a small business,” the commander-in-chief said in a statement from the White House. “But the fight is not over. We must finish the job in transitioning to stable and steady growth that benefits all Americans, while laying the foundation for strong and shared growth for years to come.”
Critics of the White House say the claim is one of several misleading assertions from senior officials about a supposed recent decline in cost pressures. The most recent inflation report from the Bureau of Labor Statistics, which likewise showed continually elevated food and energy prices despite a lower headline inflation number, occurred one week after Biden said that “inflation is coming down” during his second State of the Union address.
House Ways and Means Committee Chairman Jason Smith (R-MO) said in a Friday statement provided to The Daily Wire that the administration “has no plan to bring down inflation” but nevertheless seeks to implement more federal spending initiatives. “Families, farmers, and small businesses continue to suffer as a result of President Biden’s radical partisan agenda, yet he insists he will not abandon it,” he remarked.
The response to the Personal Consumption Expenditures Price Index data comes one day after Vice President Kamala Harris said in a speech that the administration has “reduced heating and electricity bills so folks have more money in their pocket to buy things like school supplies, replace the dishwasher, or take a family vacation.” The average cost of electricity has nevertheless increased 24% over the past two years, according to data from the Bureau of Labor Statistics, while the cost for utility natural gas increased 63% over the same period.
Despite the optimism from the White House, many households indicate they are in a precarious economic situation. Some 50% of respondents to a Gallup survey said they are financially worse off compared to last year, while 35% believe they are financially better off. Low-income Americans were the most likely to report that they have been worse off: some 61% reflected pessimism about their current finances in 2023, an increase from 41% in 2022.