Inflation spikes in December, complicating Biden’s economic pitch

Inflation accelerated in December, the Labor Department revealed Thursday, complicating President Biden’s reelection argument that he has made progress on trimming rising prices.

Data from the Bureau of Labor Statistics showed that prices rose 3.4% in December compared with the year before. It’s also an increase from the 3.1% in November. Prices also rose 0.3% in December over the previous month.

The increases were much higher than forecasted by Wall Street analysts, who had predicted increases of 3.2% and 0.2%, respectively.

So-called core inflation, which measures price increases without accounting for volatile items like food and energy, remained relatively unchanged compared to the prior month. Core inflation in December was 3.9% compared to 4.0% in November.

Energy and housing costs pushed inflation upwards. Rent was up 0.4% in December compared to the month before and 6.5% compared to December 2022. Car insurance also increased 1.5% in December over the previous month and 20.3% from the year before.

The White House said that despite the Labor Department data, they are seeing signs that prices are dropping.

“We’ve actually seen several categories of food prices coming down over the last year,” National Economic advisor Lael Brainard said. “If you look at dairy, it’s come down. If you look at fruits and vegetables — so we are very focused on grocery prices for American families and we are actually seeing prices coming down over the year.”

The inflation numbers come as Mr. Biden’s Republican opponents hammer him on rising prices.

“Prices have jumped 17.3% since Joe Biden took office, and Americans can’t afford it. As voters usher in 2024, they are making less while paying more for everything from gas to groceries — and they know that Bidenomics is to blame,” Republican National Committee Chairwoman Ronna McDaniel said in a statement.

Former President Donald Trump, who is the front-runner for the GOP presidential nomination, this week railed against Mr. Biden’s handling of the economy.

“Our Middle Class is being crushed by Biden’s crippling inflation,” he wrote on Truth Social.

Those seeking to wrestle the GOP nomination away from Mr. Trump have also suggested that the former president’s big spending priorities may have contributed to rising inflation.

“When it comes to our economy and getting inflation under control, the first thing we need to do is claw back the over $100 billion of unspent COVID dollars that are still out there,” former South Carolina Gov. and GOP presidential candidate Nikki Haley said during a CNN town hall this week.

Polls have shown voters have soured on Mr. Biden’s economic record, despite low unemployment. Mr. Biden is headed to Allentown, Pennsylvania, on Friday, where he plans to again make the case that his economic policies are working.

A CNN poll released last month found that 40% of Americans say the economy or the cost of living is the most important issue facing the country, far above any other issues.

Mr. Biden’s approval rating dropped to a record low of 34%, according to a Monmouth University poll released last month, with more than 70% of respondents disproving of his handling of inflation. More than half of those surveyed also disapproved of his job creation record, despite presiding over a strong labor market.

Mr. Biden has tried to ease voters’ concerns by touting the benefits of his economic agenda, which he has dubbed “Bidenomics.” The term is a catch-all for the president’s legislative wins, including trillions in COVID-19 stimulus funds and to repair the nation’s infrastructure.

Since June, Mr. Biden freely used the word “Bidenomics” in his speeches, but lately has dropped it from public comments. It was absent from speeches he made last month in Colorado and Minnesota and he said it once in a speech he made two weeks ago in Milwaukee.