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WASHINGTON (AP) — President Joe Biden will increasingly be able to claim he helped reduce inflation if he can convince voters to believe him.
Statistics released last week reflect historic levels of progress in combating high prices, with inflation likely to approach the Federal Reserve’s 2% target around the November election. It suggests that there is. While the Consumer Price Index recorded an annual increase of 3.4%, the prices charged by producers of goods and services rose by only 1% over the past year.
Current and former aides say Mr. Biden is keen to do more to curb inflation, with his approval ratings eroded by rising prices in 2021 and 2022, a drag on his re-election bid. They believe there is reason to be optimistic about improving consumer sentiment.
“This is an ongoing effort,” White House Chief of Staff Jeff Zients said. “Under his leadership, we have attacked inflation from every angle.”
The question is whether voters will see an improvement and reward Mr. Biden. Or will they punish him because inflation has become a problem on his watch as the US emerges from the pandemic government shutdown? The answer may depend on how people feel about the cost of necessities like gasoline and eggs.
Biden can accurately say that his policies helped lower the average price of 12 eggs to $2.51, according to the Bureau of Labor Statistics. This is down from last year’s peak of $4.82. But Republicans can counter that before Biden became president, the price of 12 eggs was $1.47.
Leading Republicans, including Rep. Jason Smith of Missouri, chairman of the House Ways and Means Committee, hailed the latest inflation numbers as evidence that voters are still suffering from high prices, saying, “President Biden’s inflation “The crisis continues to take a toll on working families’ wallets.” ,” He said.
Former President Donald Trump told supporters that inflation under the Biden administration would be “destroying the country” and that Trump’s return to the White House would mean lower energy costs.
“Drill, baby, drill,” Trump said in a video posted to social media. He said, “We’re going to bring down electricity prices a lot. We’re going to get energy prices down a lot. Gas is going to go back to $2, maybe less.”
Average gas prices did fall below $2 a gallon during President Trump’s term, according to federal data. But that was in early 2020, during the coronavirus pandemic, which shuttered schools and businesses, put millions out of work, and shocked the U.S. economy. A historic wave of federal borrowing has stabilized the U.S. economy during the deadly pandemic.
In 2021, Biden inherited an economy trapped by uncertainty about the course of the pandemic. He signed a $1.9 trillion aid package, which Republicans and some economists say will trigger a rise in inflation that could push the consumer price index to a 40-year high by June 2022. It claims to have recorded 9.1%.
Past and current Biden administration officials say the decline in inflation since then was the result of a series of choices. Biden has given the Fed political leeway to raise interest rates. He strengthened the supply chain and helped stabilize gas prices. At the same time, a historic hiring surge continues under the Biden administration. Outside economists said that would become impossible if inflation fell.
Starting with Biden himself, the White House rejected conventional wisdom that millions of workers may need to lose their jobs to cool demand and ease inflation.
“The president was really focused on using every tool he could to bring down prices without taking an ax to the labor market,” said Bharat Ramamurti, former deputy director of the White House National Economic Council.
Some aides said the job growth is helping fill gaps in an economy recovering from the coronavirus shutdown. The unemployment rate is a healthy 3.7%, and the economy under Biden’s watch has so far added about 5 million more jobs than the Congressional Budget Office had projected before his policies took effect. Adding. These policies include bipartisan infrastructure legislation, spending to increase production of computer chips and shift the economy away from fossil fuels, and lower insulin prices for Medicare enrollees.
Mr. Biden and many of his aides initially viewed inflation as a result of tightening global supply chains. Factories around the world are still struggling to fully reopen. The cost of shipping containers has increased tenfold. There were long delays in entering major U.S. ports. While many Americans viewed inflation through the lens of grocery stores, shopping malls, and gas stations, the White House viewed inflation as a global problem.
“We showed him international charts and showed him that this is happening all over the world, and that in countries with very different fiscal policies, inflation “We showed that the rate increases were different.”
Biden has adopted a strategy of working with the private sector to improve supply chains. The California ports of Los Angeles and Long Beach began operating nonstop operations to clear backlogs. The administration helped states reduce barriers to people seeking to obtain commercial driver’s licenses and become truck drivers.
But the president missed the mark in July 2021 by claiming that inflation would be “temporary.” Inflation accelerated for nearly a year after Biden’s comments, so it felt like it would last much longer.
A White House analysis in November found that 80% of the decline in inflation after 2022 was due to some form of supply chain improvement. As the economic recovery matured, the pace of employment slowed and inflation also slowed. The main driver of inflation in Thursday’s Consumer Price Index was housing costs, and experts expect this number to fall in the coming months, leading to further declines in inflation.
Still, supply chains weren’t the whole issue for Biden. After Russia invaded Ukraine in early 2022, food and energy prices soared as markets recognized the risk of war-related shortages.
Biden responded in part by releasing a historic 180 million barrels of oil from the U.S. strategic stockpile.
While some analysts and Republicans downplayed the release as a Band-Aid to a larger problem, the White House said releasing 1 million barrels a day over the next six months would be a bridge to increasing U.S. oil production. He argued that it would be.
Since the release was announced in March 2022, average daily U.S. crude oil production has increased by 1.44 million barrels. The country pumped a record average of 13.25 million barrels of crude oil per day in October.
Republican lawmakers often criticize Biden for not being friendly to oil drilling. However, data shows that despite disruptions such as the Israel-Hamas war and recent Houthi attacks on ships in the Red Sea, the US market has responded to the initial lure of higher prices by increasing production, thereby increasing future This suggests that inflation risk has been limited.
Still, the Biden administration has made support for renewable energy one of its climate change priorities. As a result, officials don’t talk much about record domestic oil production.
Ben Harris, a former assistant secretary of the Treasury, said the release of Russian oil and price caps “prevented us from having an oil crisis like we had in the 1970s.”
But voters are far from relieved.
At the end of last year, 65% of American adults disapproved of Biden’s handling of the economy, according to a poll by The Associated Press-NORC Center for Public Affairs Research.
By contrast, in March 2021, when pandemic aid became law and inflation was just 2.6%, 60% of adults said they approved of Biden’s economic leadership.
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