President Biden received a double whammy of bad economic news recently with two separate Labor Department reports showing America’s prolonged battle with inflation is still ongoing and undercutting his reelection message.
On Thursday, the Producer Price Index, which measures inflation at the wholesale level, rose 2.1% in March compared to a year earlier, the biggest gain since April 2023 and a sign that economic pressures could keep inflation elevated. While the increase was below expectations, it is up from a 1.6% gain in February.
A day earlier, the Consumer Price Index revealed that consumer prices for gas, mortgages and household goods vaulted to a 3.5% increase for the 12 months ending in March, according to the Bureau of Labor Statistics. That’s up from February’s 3.2% rate and marks the highest annual gain in prices in the past six months.
Both reports highlight that stubborn inflation continues to batter voters’ wallets and any loosening of monetary policy in the form of lower interest rates likely won’t occur anytime soon.
“Not as ugly as CPI but still not enough good news to prompt the Fed to cut as quickly as many hoped,” KPMG economist Diane Swonk wrote on X.
The reports also make it much harder for Mr. Biden to argue that inflation has steadily declined since hitting a 40-year high in the summer of 2022.
Even though the U.S. economy has added millions of new jobs under Mr. Biden, soaring inflation during his administration has cast a shadow over his economic agenda and is perhaps his biggest political weakness heading into November.
Recent polling shows that voters’ views on Mr. Biden’s handling of the economy have improved, but they remain highly skeptical of his performance.
A USA Today/Suffolk University Poll released last month showed that about 30% of registered voters believe the economy is recovering, the highest share of Mr. Biden’s tenure, but still underwater. The same poll revealed that former President Donald Trump, the likely GOP nominee, has a slight lead over Mr. Biden.
The White House says Mr. Biden is working every day to lower costs for Americans.
“The president has made very clear that he understands what Americans are facing and he’s talked at almost every event he’s had crisscrossing the country after the State of the Union about lowering costs, how important it is and how there’s more work to do,” White House press secretary Karine Jean-Pierre said.
The threat inflation poses to Mr. Biden’s reelection is significant. His campaign has tried to adjust, abandoning the phrase “Bidenomics” that he used last year to describe his agenda. Republicans are now using the term more frequently than Mr. Biden as a way to mock his economic plans.
Still, the president maintains a rosy outlook on the economy. During a press conference Wednesday with Japanese Prime Minister Fumio Kishida, Mr. Biden said he expected the Federal Reserve to cut interest rates later this year.
• Jeff Mordock can be reached at jmordock@washingtontimes.com.
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