President Joe Biden and members of his administration are trying to shift blame for surging prices on what they call the “Putin price hike” that they say resulted from Russia’s invasion of Ukraine.
After the latest inflation report found that prices rose 7.9% in February compared to last year, Biden released a statement that claimed, “Families are starting to feel the impacts of Putin’s price hike.”
However, Steven Rattner, an economic adviser for former President Barack Obama, is calling out the claim Putin’s invasion was behind the surge in prices in February.
On Thursday, Rattner shared an excerpt of that statement and wrote, “Well, no. These are [February numbers] and only include small Russia effect.”
“This is Biden’s inflation and he needs to own it,” he added.
Well, no. These are Feb #'s and only include small Russia effect. This is Biden's inflation and he needs to own it. https://t.co/WsJjn6picV
— Steven Rattner (@SteveRattner) March 10, 2022
It is true that gas prices rose 6.6% in February and made up about a third of inflation for the month. Even at the beginning of the month, concerns about Russia invading Ukraine led gas prices to increase.
And that leads to higher costs to transport food and other goods, which could drive up their prices even more.
But as Rattner points out, the invasion did not take place till the end of the month.
According to the U.S. Energy Information Administration (EIA), the average national price for a gallon of gas was $3.44 for the week ending Feb 7. Over the next two weeks, the price rose nine cents to $3.53.
That puts us right before Russia launched its invasion on Feb. 24.
In the next to weeks, stretching into March, the average price of gas, according to AAA, surged 80 cents to $4.33.
So gas prices really did not start to skyrocket until the last week of the shorter month.
And as The Wall Street Journal notes, if you exclude gas and food prices — which tend to be the most volatile — inflation rose 6.4% in February, which was up from 6% in January.
February was just the latest month to see inflation at a 40 year high — or close to it. Higher inflation was already expected to stretch in 2022 due to supply chain issues, a tight labor market, and the trillions of dollars of stimulus money pumped into the economy due to the COVID-19 pandemic. And it accelerated in January as well.
Rattner also called out Biden last month for blaming inflation on supply chain disruptions and pointed to increased spending among Americans, as IJR reported.
If gas prices rise or stay at their current level and pour rocket fuel on inflation in March, it could be more understandable for the administration to blame the “Putin price hike” for inflation this month as that is more likely when Americans will really start to feel the fall out effects of Russia’s invasion.
But for February, as Rattner points out, it seems the month’s inflation report was just a continuation of a trend the country experienced over the past year.