(The Center Square) – President Joe Biden earlier this week touted a major drop in inflation, saying prices had fallen more than 60%. Those comments come on the heels of more federal data showing prices are on the rise which raises the question: Has inflation really fallen or is something else going on?
The U.S. Bureau of Labor Statistics earlier this week released its Consumer Price Index, a key marker of inflation that has spiked recently. BLS found the CPI rose another 0.4% last month, part of a 3.5% increase over the previous twelve months.
Soon after that data was released, Biden released a statement boasting of a drop in inflation.
“Today’s report shows inflation has fallen more than 60% from its peak, but we have more to do to lower costs for hardworking families,” Biden said. “Prices are still too high for housing and groceries, even as prices for key household items like milk and eggs are lower than a year ago. I have a plan to lower costs for housing — by building and renovating more than 2 million homes —and I’m calling on corporations including grocery retailers to use record profits to reduce prices.”
Part of the confusion comes from the difference between inflation and overall prices. Prices have soared since Biden took office and have not gone back down.
In fact prices are still rising, and prices overall have risen about 20% since Biden took office.
Some goods have seen even higher rises during that time. Meanwhile, gas prices have spiked recently and are expected to continue getting more expensive through this summer.
The reason Biden can technically claim inflation has “fallen” is because prices went from increasing at a breakneck pace to increasing more slowly, but still at a higher speed than what economists would like.
Prices went from increasing about 9% per year to increasing 3.5%, and therefore could be considered a decrease in the rate of inflation.
Ryan Young, senior economist at the Competitive Enterprise Institute, called Biden’s comments “spin.”
“Year-over-year inflation is currently 3.5 percent, down from 9.2 percent,” Young said. “So yes, down 65 percent from peak inflation is correct. It also misses the point. Prices overall have risen about 20 percent since the pandemic…that’s the more important part.”
Regardless, in his statement earlier this week Biden boasted of rising wages and his other wins.
“Fighting inflation remains my top economic priority,” Biden said. “We’re making progress: Wages are rising faster than prices, incomes are higher than before the pandemic, and unemployment has remained below 4% for the longest stretch in 50 years.”
Republicans, though, continue to blast Biden for the prices, regardless of his claims of fallen inflation.
“Here’s a Bidenomics breakdown: The average Montana household has spent $26,391 more due to inflation since Jan. 2021, according to the Joint Economic Committee,” Rep. Ryan Zinke, R-Mont., wrote on X, formerly known as Twitter. “There’s no spin that can fix how bad Biden is for the economy.”