Biden Says There’s More Work to Do on Inflation as Data Stay Stubbornly High
2023.02.14 10:57
(Bloomberg) — President Joe Biden said there’s more work to do to tame US inflation, after the latest data showed monthly price growth accelerating in line with economists’ forecasts.
Monthly inflation rose 0.5% in January, while so-called core monthly inflation rose 0.4%, each matching estimates from economists. Both readings were the highest since the fall.
Annual inflation was higher than expected at 6.4%, versus a forecast of 6.2% and down slightly from the previous month’s 6.5%. Core annual inflation was 5.6%, compared to an estimate of 5.5%. That’s seven consecutive months of decline in the annual figure, though only barely.
“Inflation in America is continuing to come down, which is good news for families and businesses across the country,” Biden said in a statement Tuesday that sidestepped directly addressing the acceleration in monthly price growth. “There is still more work to do as we make this transition to more steady, stable growth, and there could be setbacks along the way.”
The 6.4% reading was the lowest since late 2021 but was down only a shade from the month prior, stoking fears that inflation’s deceleration will be a long, stubborn journey that forces the Federal Reserve to keep rates elevated or even raise them higher.
Read more: US Inflation Stays Elevated, Adding Pressure for More Fed Hikes
The reading comes as the Fed weighs how many further hikes it will make before any pause, and as Biden braces for a showdown with Republicans over raising the federal debt ceiling. Republicans are demanding spending cuts as a condition of increasing the borrowing cap.
Some Republicans “are threatening to default on the full faith and credit of the U.S., which would raise costs and create economic chaos” in the event of a default, Biden said.
The Treasury Department has begun taking “extraordinary measures” to avoid breaching the debt ceiling, and expects those won’t run out before June at the earliest.
