The Consumer Price Index (CPI) rose 8.5% year-over-year as of July, reflecting a slight inflation cooldown even as prices remain near record levels, according to a Wednesday report from the Bureau of Labor Statistics.
The 9.1% inflation reading observed in June marked the highest rate reading since 1981. July’s slightly more moderate reading was driven by month-to-month declines in energy expenses, including a 7.7% decrease in gasoline prices. Yet prices for food, new vehicles, medical care, and shelter continued to increase.
Inflation refers to the percent change in the price level over a given period of time. The CPI tracks a hypothetical basket of goods and services that represents typical spending for an American household, while rises in the price level that outpace rises in wages imply that Americans are spending greater portions of their income on goods and services.
Democratic officials celebrated the latest inflation reading, implying that the slowdown in rising price levels represented a win for President Joe Biden. “Jobs up and inflation down. Wages up and gas prices down,” White House Chief of Staff Ron Klain commented on social media.
Last month, the Biden administration spun the 9.1% inflation reading by arguing that the report would be outdated. “We expect the headline number, which includes gas and food, to be highly elevated, mainly because gas prices were so elevated in June,” White House Press Secretary Karine Jean-Pierre told reporters at the time. “The President’s number one economic priority is tackling inflation. And looking ahead, there are a number of reasons why we expect those high prices to ease over the coming months.”
Yet arguments from the White House in early June posited that the United States economy is strong. “What I’m trying to say to you is that the economy is in a better place than it has been historically,” Jean-Pierre said at the time. “And so, we feel, here at this administration and other experts as well… we feel that we are in a good position to take on inflation. We are in a good position to really start really working on lowering prices.”
The newest inflation report occurs as the Biden administration endorses the “Inflation Reduction Act” — a $740 billion package which includes $369 billion in spending on climate change. Vice President Kamala Harris cast the tiebreaking ballot in a party-line vote in the Senate earlier this week.
“This bill tackles inflation by lowering the deficit and lowering costs for regular families,” Biden said upon the bill’s passage in the Senate. “It addresses the climate crisis and strengthens our energy security, creating jobs manufacturing solar panels, wind turbines, and electric vehicles in America with American workers… it pays for all this by establishing a minimum corporate tax so that our richest corporations start to pay their fair share.”
In a statement provided to The Daily Wire, Job Creators Network CEO Alfredo Ortiz contended that the White House remains “detached from economic reality.”
“I’m sure the Biden administration will parade around today’s CPI report as a sign of a robust economy, touting the small percentage decrease as a sign that Biden’s economic plan is working. That couldn’t be further from the truth,” he remarked. “Wages aren’t keeping up with inflation which means Americans are experiencing the Biden pay cut… Economic rule number one: you never raise taxes during a recession, yet the Biden administration wants everyone to believe that the Inflation Reduction Act will help the economy.”