Consumer prices jumped 7% in December to hit the highest cost of living increase since 1982, the Labor Department reported Tuesday, just a few months after President Biden scoffed that “no serious economist” was worried about unchecked inflation.
Prices rose on a wide variety of goods such as food (6.3% for the year), furniture (17.3%) and propane (33.8%). Used vehicle prices increased 3.5% in December because of persistent supply chain shortages of semiconductors and other parts, bringing the increase from a year ago to 37.3%.
The historic rise in prices has put many families further behind with their household budgets and erased significant wage gains in 2021. Real wages for the year fell 2.4%, the Bureau of Labor Statistics said.
Core inflation, which subtracts food and energy costs, jumped 5.5%, the highest level since 1991.
The report puts Mr. Biden and congressional Democrats on the defensive as midterm election campaigns swing into high gear.
The president and his advisers increasingly are calling inflation and supply chain bottlenecks global problems, implying that the challenges are partly out of the administration’s control.
SEE ALSO: Powell calls inflation a severe threat, disputes White House claims of easing supply-chain woes
Voters are losing more confidence in Mr. Biden’s handling of the economy. A Quinnipiac University poll released Wednesday showed that 34% of Americans approve of the president’s supervision of the economy, down from 43% in the same poll in August.
The president’s overall job approval was 33%, including 25% among independents and 28% among Hispanics.
Republican candidates for Congress seized on the development.
“President Biden and Democrats’ reckless left-wing spending spree has poured gasoline on an inflation firestorm,” said Mehmet Oz, a Republican candidate for Senate in Pennsylvania.
Alek Skarlatos, a Republican running for a House seat in Oregon, said inflation is costing families “more money to buy groceries, heat our homes, fill our gas tanks, which is proof that Joe Biden’s policies are failing.”
In July, the president belittled the suggestion that inflation was becoming a serious problem.
“There’s nobody suggesting there’s unchecked inflation on the way — no serious economist,” Mr. Biden said at the time.
On Wednesday, Mr. Biden tried to put the dismal report in the best possible light by pointing to “a meaningful reduction in headline inflation over last month, with gas prices and food prices falling.”
“We are making progress in slowing the rate of price increases,” the president said in a statement. “At the same time, this report underscores that we still have more work to do, with price increases still too high and squeezing family budgets.”
Gas prices were up 49.6% for the year despite falling 0.5% in December.
Brian Deese, director of White House National Economic Council, didn’t have many answers. “A number of projections and forecasts have come out differently than we anticipated,” he said. “We’ve seen a number of unanticipated outcomes.”
He said most projections now estimate that price increases “will moderate … over the course of 2022.”
Federal Reserve Chairman Jerome Powell told Congress on Tuesday that inflation is now a “severe threat” to healthy employment levels and that he expects high prices to continue into the middle of the year. He said the central bank is prepared to raise interest rates several times this year to fight rising prices. Such action will increase the costs of home mortgages, auto loans and credit card balances.
Mr. Powell refuted the White House claims that the supply chain crisis has eased. He blamed the problem for the brunt of inflation and said little progress has been made to resolve it.
Mr. Deese said the administration is working to set up more “inland ports” to relieve congestion at waterfronts and is planning to impose a fee by the end of the month on empty shipping containers sitting at ports.
The Committee for a Responsible Federal Budget, led by Maya MacGuineas, released an analysis Wednesday noting that Washington borrowed $2.6 trillion in 2021.
The group called on the administration and Congress to curb spending. “With high debt, surging inflation and interest rates slated to rise, it’s time to put away the national credit card,” it said.
Business groups and Republican lawmakers pointed to the record-high inflation rate as another reason to put the brakes on federal spending, including Mr. Biden’s stalled $1.8 trillion social welfare and climate proposal.
“Today’s numbers are a reminder that we need policymakers focused on combating inflation,” said Suzanne Clark, president and CEO of the U.S. Chamber of Commerce. “That means avoiding policies like the current so-called Build Back Better Bill that will fuel greater near-term price increases. Instead, policymakers should pursue policies that will reduce inflationary pressures, including addressing the worker shortage crisis, expanding trade and reducing tariffs.”
Sen. Joe Manchin III of West Virginia, a holdout Democrat whose vote is needed to pass the social welfare bill, said inflation “is a concern for every American, especially every West Virginian.”
“It’s hitting us very hard,” Mr. Manchin told reporters.
White House officials said the inflation report gives Congress even more reason to approve the president’s Build Back Better plan.
For working Americans struggling with costs, Mr. Deese said, the measure “would directly address those issues” by providing more money for child care and other expenses.
House Minority Leader Kevin McCarthy, California Republican, said Mr. Biden and his advisers don’t know what they are doing.
“Despite the glaring warning signs, President Biden’s only strategy has been to spend more and do nothing to get ahead of these soaring costs,” Mr. McCarthy said. “Now, six months later, we know they were either misleading or completely incompetent in their assessment.”
Republican National Committee Chairwoman Ronna McDaniel said Mr. Biden “does not care about the hurt he’s brought on millions of Americans.”
“Under Joe Biden, everything costs more, store shelves are empty, and small businesses are struggling to hire workers and stay open,” she said. “Americans are paying the price for Biden‘s failures, and Biden doesn’t care.”
Correction: An earlier version of this story gave an incorrect past position for Maya MacGuineas.
• Dave Boyer can be reached at email@example.com.
Copyright © 2023 The Washington Times, LLC. Click here for reprint permission.
Click to Read More and View Comments
Click to Hide
Please read our comment policy before commenting.