President Joe Biden is probably hoping and praying that inflation can be addressed without sending the economy into a tailspin.
In April, it appeared that there might be glimmers of hope for the president as inflation slowed for the first time since August at 8.3%, which led some economists to suggest that inflation hit its peak.
But according to the latest data from the Bureau of Labor Statistics, inflation accelerated in May.
The consumer price index rose 8.6% in May compared to the same month last year, marking the fastest pace of price increases since Dec. 1981.
Energy prices rose 34.6% annually while grocery prices rose 11.9% — which was the largest spike since 1979.
Neil Irwin, Axios’ chief economic correspondent, reacted to the inflation report in a tweet, “I keep looking at the line item breakdown of the CPI report searching for silver linings, and I just don’t see any.”
“This report is a disaster if you’re a Fed or Biden administration official hoping this inflation will go away without a serious downturn,” he added.
I keep looking at the line item breakdown of the CPI report searching for silver linings and I just don't see any. This report is a disaster if you're a Fed or Biden administration official hoping this inflation will go away without a serious downturn.
— Neil Irwin (@Neil_Irwin) June 10, 2022
Meanwhile, Chris Rupkey, chief economist at the research firm FWDBONDS LLC, said in an analyst note, “Whatever Washington has done to try to fix the cost of living crisis in America, it isn’t working.”
“This isn’t just Russia and Ukraine anymore,” he added.
Sarah House, a senior economist at Wells Fargo Securities, told The Wall Street Journal, “Inflationary pressures were seen nearly everywhere.”
“We suspect that the formidable momentum in inflation could push the headline rate for CPI close to 9% as early as next month,” she added.
At this point, there is not much Biden can do to fight inflation except stop pushing for massive spending packages that pump up demand, and hope that the Federal Reserve can successfully raise interest rates and cut inflation without sending the economy into a recession.
If inflation is hovering around 9%, or the country is entering a recession, or both, heading into the midterms, Democrats will be in big trouble.
It makes sense why Biden is urging voters to make candidates’ stance on gun control a voting issue.
“You’ve got to make sure that this becomes a voting issue. It’s got to be one of those issues where you decide your position on the issue of senator or candidate for House or Senate, on what we’re going to do with assault weapons. … What you say on those things is going to determine how I vote for you,” Biden said during an appearance on ABC’s “Jimmy Kimmel Live” this week.
The bad news for the president is so far, polls have repeatedly shown that inflation and gas prices are still the top concerns for Americans.
Even an ABC News/Ipsos poll conducted after the mass shootings in Buffalo, New York, and Uvalde, Texas, shows 80% of respondents said inflation is an important issue for deciding how they will vote, and 74% said the same of gas prices. Meanwhile, 72% said gun violence was a major factor.
But on all of those issues, Biden is severely underwater.