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An upcoming government consumer price report will likely show another lofty spike in U.S. inflation in the first month of the year, the White House warned on Wednesday.
Consumer prices rose by 7% throughout 2021, their fastest pace in four decades and the Labor Department’s consumer price index (CPI) data set for release Thursday is anticipated to show a large increase compared to January 2021.
“We expect a high yearly inflation reading in tomorrow’s data,” White House press secretary Jen Psaki told reporters. “Above seven percent, as I think some are predicting, would not be a surprise.”
Biden’s approval ratings last year sank amid the spike in inflation caused by a combination of supply chain snarls, component shortages and the U.S. economy’s rebound from COVID-19.
While the price increases were particularly severe for used cars and energy, particularly gasoline, they also hit items like food and rent.
However, many economists expect the price surge to moderate over the course of 2022 as the shortages and delays are sorted out, and as the Federal Reserves raises interest rates and ends its easy-money policies intended to support the economy during the pandemic.
“What we’re looking at is recent trends … the inflationary increases are decreasing month to month,” Psaki said.
The month-on-month increase in December 2021 CPI was 0.5%, less than the 0.8% rate a month prior.
“Leading outside forecasters continue to project that inflation is expected to decrease and expected to moderate over the course of this year,” she added.
Economists expect the month-on-month change for January 2022 will be the same as the month prior. For core CPI, where volatile food and energy prices are stripped out, they anticipate 0.5% monthly growth, slightly less than in December.