After the dust settled, the Dow Jones Industrial Average had fallen 2.73%, the Nasdaq had fallen 3.52%, and the S&P 500 had fallen 2.91%.
On Thursday morning, GasBuddy announced that the national average price of gasoline hit $5 per gallon. Days earlier, gas prices were $4.82 per gallon — more than double the $2.39 average when President Joe Biden entered the Oval Office at the beginning of last year.
Then on Friday, a report from the U.S. Bureau of Labor Statistics revealed that the Consumer Price Index (CPI) rose 8.6% between May 2021 and May 2022, meaning that inflation hit new four-decade record highs once again. The new figure surged past the Dow Jones estimate of 8.3% year-over-year inflation.
Biden attributed the ugly report to “Putin’s Price Hike.” He also pinned the blame on purported corporate price-gouging and wealthy Americans failing to pay higher taxes.
“Prices at the pump are a major part of inflation, and the war in Ukraine is a major cause of that. The United States is on track to produce a record amount of oil next year, and I am working with the industry to accelerate this output,” Biden said in a statement. “But it is also important that the oil and gas and refining industries in this country not use the challenge created by the war in Ukraine as a reason to make things worse for families with excessive profit taking or price hikes.”
Although most social media accounts for Democratic members of the Senate discussed the January 6 protest hearings on Friday morning while remaining silent about the dismal inflation news, two lawmakers — Sen. Amy Klobuchar (D-MN) and Sen. Elizabeth Warren (D-MA) — called for Congress to pass legislation they believe will slash prices.
Klobuchar — pointing toward a Thursday tweet from President Joe Biden that blames high prices on “a handful of companies who control the market” for shipping — referred to her Ocean Shipping Reform Act as a mechanism to prevent the firms from “jacking up prices.” Meanwhile, Warren praised Klobuchar’s American Innovation and Choice Online Act — which, according to Warren, would “promote competition and lower consumer prices” by prohibiting technology firms from “favoring their own products.”
Many economists are watching the Federal Reserve as it considers a faster rollback of its aggressive monetary stimulus. Although the central bank already introduced two interest rate hikes this year — 0.25% in March and 0.5% in May — many on Wall Street believe that a 0.75% rate hike may be on the table.
Polls indicate that Americans are worried about rising price levels ahead of this year’s midterm elections.
In a Harvard survey, 95% of respondents said that inflation is “very serious” or “somewhat serious.” A plurality — 47% — said that the Biden administration is responsible. Another poll from The Washington Post and ABC News revealed that 94% of Americans were either “upset” or “concerned” about the impact of skyrocketing prices. Biden’s approval rating was underwater, with 42% of respondents approving of his work and 52% disapproving.