Janet Yellen

Eric Garcia, The Independent

President Joe Biden got hit with some negative news on Thursday morning when the Bureau of Labour Statistics released its Consumer Price Index report. The report showed that inflation rose 0.2 per cent in July and 3.2 per cent for the past 12 months. That number is roughly the same as the 0.2 per cent monthly rate for the month of June and slightly higher than the 3.0 per cent for the annual rate for that month. June had marked the lowest increase in inflation since March 2021. But the details matter. The food index rose 0.2 per cent after it rose only 0.1 per cent in June, and it rose 4.9 per cent in the past 12 months overall. While inflation has declined significantly since the depths of the pandemic and 2022, voters are most likely to still feel the pinch and are likely to see it directly when they go to the grocery store.

In the same respect, shelter caused most of the increase, contributing 90 per cent to the all-items increase. In all, it rose 0.4 per cent in the past month and 7.7 per cent in the past twelve months. More than the war in Ukraine, more than MAGA Republicans, the House GOP’s probes into his son Hunter or Senate Minority Mitch McConnell, inflation has been Biden’s most persistent obstacle to winning a second term in the White House. Republicans have hit him over the head about rising prices, specifically because Treasury Secretary Janet Yellen and Federal Reserve Chairman Jerome Powell both said in the early part of the Biden administration that inflation would be “transitory,” though Ms Yellen would later say she regretted using the term.

For Biden, who still has a stunningly low approval rating for an incumbent president and faces persistent questions about his age, to have a legitimate shot at winning re-election, voters need to believe the US economy is actually improving and that they will see better days, even as unemployment remains low. This explains why the White House and Biden has gone all-in on his “Bidenomics” messaging. This week, he visited Arizona and Colorado to tout his signature Inflation Reduction Act, his climate and health care legislation that Sen Joe Manchin and Senate Majority Leader Chuck Schumer crafted (though Mr Manchin has spent much of the past year complaining about its implementation).

He even touted how CS Wind would be creating the largest wind tower manufacturing plant in the district of Rep Lauren Boebert (R-CO), whom he called “the very quiet Republican lady,” despite her opposition to it. Indeed, his statement after the CPI report highlighted how inflation is not in the same spot it was last year and the other bright spots within the economy.

“We’ve made this progress while maintaining the broad strength of our economy: unemployment remains near record lows, a higher share of working age Americans are working now than in 20 years, real wages for the average American worker are growing and are higher than they were before the pandemic — with lower wage workers seeing the largest gains. We’re growing the economy from the middle out and bottom up, lowering costs for hardworking families, and making smart investments in America: that’s Bidenomics,” he said.

Similarly, he noted that “inflation outside of food and energy has fallen to its lowest level in any three-month period since September 2021.” At the same time, that might be difficult for some voters to stomach given they see rising prices when buying food or gas at the pump than other price increases. To be sure, one month of inflation ticking up slightly does not indicate a trend. Nor does it mean that recession is imminent or that the president has to be worried just yet. Still, it does make it harder for the president to make the case for his re-election.