The latest inflation report is brutal
But the White House is adamant that the headline data tells an incomplete story. Plus: Updates on where things stand in Congress on reconciliation and reproductive health care.
The White House expected the June inflation report to be bad. But the actual numbers were worse than anticipated.
The Consumer Price Index increased one percent in May, up 9.1 percent over the past year — the largest 12-month increase since November 1981.
You can probably take a look at your budget and identify the largest contributors to this spike: gas, housing and food. In fact, energy contributed nearly half of the increase, rising 7.5 percent last month. Gas increased 11.2 percent. And grocery store or supermarket food purchases climbed one percent.
Outside those categories, used cars and trucks, new car purchases, car insurance and health care saw the highest increases. The same goes for car repairs, clothing, home furniture and expenses and entertainment.
If you’re looking for a silver lining: Costs for airfare and hotels and motels saw a decline in June.
“Inflation is our most pressing economic challenge. It is hitting almost every country in the world,” President Joe Biden, who is currently in Israel on the first leg of a three-stop Middle East trip, said in a statement. “It is of little comfort to Americans to know that inflation is also high in Europe and higher in many countries there than in America. But it is a reminder that all major economies are battling this COVID-related challenge, made but [Russian President Vladimir] Putin’s unconscionable aggression [in Ukraine].
Senior administration officials spent the past two days emphasizing that the CPI is a backward-looking analysis and is an outdated reflection of the current energy outlook. Gas prices, for example, have dropped 12 cents since last week and the national average for a gallon of gas is 32 cents less than a month ago.
The officials acknowledged the headline inflation numbers were probably going to be elevated but told reporters on Tuesday that economists usually focus on core inflation, which represents the change in prices of goods and services, except for those from the food and energy sectors, as a more salient indicator of where the economy is headed. President Biden noted that core inflation is down for the third month in a row and June was the first month since last year where annual core inflation is below six percent.