President Biden on Wednesday downplayed the significance of new data showing annual inflation reached its highest level in decades in June, arguing the report was outdated because of recent drops in gas prices.
“While today’s headline inflation reading is unacceptably high, it is also out-of-date,” Biden said in a statement. “Energy alone comprised nearly half of the monthly increase in inflation. Today’s data does not reflect the full impact of nearly 30 days of decreases in gas prices, that have reduced the price at the pump by about 40 cents since mid-June.”
“Those savings are providing important breathing room for American families. And, other commodities like wheat have fallen sharply since this report,” Biden added.
The president was responding to the consumer price index (CPI), issued by the Department of Labor, which showed inflation rose to 1.3 percent in June and 9.1 percent over the past 12 months. The report was released as Biden landed in Israel for a four-day Middle East trip.
Economists expected monthly inflation to hit roughly 1 percent in June after prices rose 1 percent in May and 8.8 percent annually after reaching 8.6 percent that month. Annual inflation reached the highest rate in June since November 1981.
Much of the June increase in inflation came from a 11.2 percent rise in gasoline costs and a 1 percent increase in food prices over the past month, according to Labor Department data. A 7.5 percent monthly increase in energy prices drove nearly half of the total monthly increase in the CPI, the Labor Department said.
Rising prices have been a chief concern for the White House for months, with the Russian invasion of Ukraine causing further uncertainty around energy and food costs.
Biden and his team have emphasized that gas prices have come down steadily for weeks from their peak in mid-June, when the cost per gallon topped $5. The average cost per gallon as of Thursday is $4.63 per gallon, according to AAA.
Biden on Wednesday called inflation “our most pressing economic challenge,” but argued it was not solely weighing on Americas.
“It is little comfort to Americans to know that inflation is also high in Europe, and higher in many countries there than in America,” Biden said. “But it is a reminder that all major economies are battling this COVID-related challenge, made worse by Putin’s unconscionable aggression.”
The president said he would continue to focus on bringing down gas prices. He is slated to visit Saudi Arabia on Friday, and while he has denied the visit is related to energy, the topic will most likely come up.
Biden said he would also push Congress to pass legislation this month intended to lower the cost of prescription drugs and health insurance, though such an agreement will largely depend on Sen. Joe Manchin (D-W.Va.), who has expressed concerns about new spending in the face of rampant inflation.
The president said he would also aim to tackle inflation by opposing Republican proposals that would raise taxes or cut social welfare programs, and he “will continue to give the Federal Reserve the room it needs to help it combat inflation.”
–Sylvan Lane contributed to this report, which was updated at 10:33 a.m.