Biden moved quickly on Thursday to tout the good inflation news

President Biden was on hand after Thursday’s positive inflation reading, speaking just over two hours after the news was announced.

the The December inflation report showed this While inflation came in at 6.5% over the past year, it continued to decline in the second half – closing into 2022 with a 0.1% decline in overall prices compared to the November data.

“Today we had some good news and some good news for the economy,” Biden said Thursday in his remarks from the White House compound.

The overall price drop announced on Thursday was due to a sharp drop in gas prices in December and a slowdown in rising food prices. the Full report It does include a single note of caution when it comes to so-called “core” inflation. This measure, which excludes food and energy, rose 0.3% between November and December and 5.7% over the full year.

WASHINGTON, DC - JANUARY 12: US President Joe Biden delivers remarks on the economy and inflation at the Eisenhower Executive Office Building on January 12, 2023 in Washington, DC.  Biden spoke about his administration's measures to lower the inflation rate, lower gas prices, and create manufacturing jobs for Americans.  (Photo by Kevin Deitch/Getty Images)

President Joe Biden delivers remarks on the economy and inflation Jan. 12 in Washington. (Kevin Deitch/Getty Images)

Biden touched on core inflation in his remarks, saying it was “good news, too” there, noting that it was the lowest level for that measure in a year.

Nonpartisan economic observers were also positive. “The tide has turned, and improvement is now the trend,” Greg McBride, chief financial analyst at, wrote after the numbers fell Thursday morning.

During Yahoo Finance Live interview On Thursday morning, Biden aide Jared Bernstein added to the chorus touting the good news, but also acknowledged that “we have more work to do, and we’re not out of the woods yet” referring to the 6.5% inflation rate for 2022. .

“We’re going to keep the pressure on it,” he said of the White House plan for the coming months. He said it was still possible for the US economy to maintain recent gains in the labor market while lowering inflation further.

Focus on wage growth

The President’s remarks and those of his team also reflected the focus on the issue of wage growth.

Biden and his aides pointed out Last week’s jobs report, which showed continued upward pressure on wages despite the Fed’s interest rate hike. Average hourly earnings increased by 0.3% in December and 4.6% over the course of 2022.

And while ordinary workers saw their purchasing power decline over the course of 2022 as a whole, purchasing power beat inflation in December as wages rose and overall prices fell slightly.

“As inflation goes down, so do home workers’ paychecks,” Biden said. “All of this adds up to a real relief for consumers [and] A real breathing room for families.”

Bernstein and other Biden aides pointed that out last year Efforts to deregulate supply chains As an additional reason for the recent wave of good inflation news.

The issue of the Federal Reserve

However, the inflation rate remains well above the Federal Reserve’s long-term price stability target of 2%.

The level of inflation may have peaked but “the level of inflation is nowhere near where the Fed would like it to be, so they will continue to tighten it a little bit,” predicted Mary Ann Bartels, chief strategist at Sanctuary Wealth. In an interview with Yahoo Finance Live Thursday.

Biden’s remarks about whether the White House and other senior Democrats would consider more forcefully pressing the Federal Reserve to moderate interest rate hikes given the improving situation were left unanswered.

Biden did not mention the Federal Reserve by name in his speech, focusing instead on his economic agenda and what he calls the extreme billings of House Republicans. During his interview, Bernstein hinted that the White House is not considering any public pressure on the central bank, citing Biden’s previous statements about how he handles the economy, including a focus on maintaining an “independent Federal Reserve.”

But some liberal groups immediately focused on the central bank.

“Chairman Powell must stop further price increases before he plans a totally unnecessary recession,” wrote Dr. Rachine Mabod, chief economist, Ground Work Group, a progressive group allied with figures like Sen. Elizabeth Warren (D-MA). Warren Powell has also called for de-escalation in recent months.

The Open Market Committee of the Federal Reserve It is scheduled to meet on January 31 and February 1 to decide its next steps.

Last month, Fed officials Raising interest rates by 50 basis pointsbringing the total standard policy rate to 4.25%, but representing a decline after a series of 75 basis point hikes that preceded it.

This article has been updated.

Ben Werschkull is Yahoo Finance’s Washington correspondent.

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