Headline inflation declined to a 5% year-over-year rate as of last month, according to data published Wednesday by the Bureau of Labor Statistics, marking a slight reprieve even as price levels in certain categories continue to rise. Inflation nevertheless remains between three times and four times higher than the rates seen at the start of the current administration.
The advertisement posted on Instagram featured a grinning President Joe Biden wearing aviator sunglasses next to an announcement of the “good news” that inflation has fallen 45% “from its summer peak.” A statement posted in the caption of the advertisement, which made no mention of the fact that inflation remains several times higher in comparison to levels recorded two years ago, asserted that the most recent price level data show “continued progress.”
“We’re seeing price declines in gas, groceries, and electronics, and wages are up. This progress is more breathing room for hard-working Americans,” the White House said. “We ought to build on our progress by lowering costs, creating jobs, and reducing the deficit, and reject Congressional Republicans’ attempt to hold our economy hostage in order to cut taxes for the wealthy, ship jobs overseas, and cut programs Americans count on.”
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Even as energy prices fell and food prices were relatively stable, costs for shelter, apparel, and household supplies continued to increase. Core inflation, which factors out the more volatile food and energy categories, increased at a 5.6% rate year-over-year.
Social media commenters observed that prices in their areas remain considerably elevated. “Prices still insane here. Not sure where you get your stats,” one user said.
“You obviously haven’t been to the grocery store lately,” added another.
“Are you going to congratulate yourself on fixing the inflation that you created please please stop just now,” remarked a third.
Record inflation over the past two years has indeed offered difficulties to households: purchasing power erodes when price level increases outpace nominal rises in pay, especially for low-income families, which typically allocate more of their income to core living expenses relative to wealthier families. Real wages, which consider the effect of inflation, fell 1.3% year-over-year as of last month, according to more data from the Bureau of Labor Statistics.
The White House consistently sounds optimistic notes about the economy despite the difficulties many households face. Biden reacted to a decrease in the unemployment rate last month by claiming there are now more “jobs that you can raise a family on,” neglecting to mention the lower real wages. “My administration is working each day to lower costs for families and to make our economy even stronger, now and for the long term, with investments in infrastructure, innovation, and clean energy,” he added.
Biden also claimed on Wednesday that his policies created a “more dynamic economy for the long haul.” On the same day, however, officials from the Federal Reserve predicted that the nation can expect a mild recession by the end of the year.