Biden says 'Putin's tax on both food and gas' is to blame for record-high inflation
Biden says fighting inflation is his 'top economic priority' as prices reach historic highs
President Biden said the United States "has never seen anything like Putin’s tax on both food and gas," after the Labor Department announced Friday that inflation hit a new four-decade high in May.
The Labor Department said Friday that the consumer price index, a broad measure of the price for everyday goods, including gasoline, groceries and rent, rose 8.6% in May from a year ago. Prices jumped 1% in the one-month period from April. Those figures were both higher than the 8.3% headline figure and 0.7% monthly gain forecast by Refinitiv economists.
INFLATION HITS FRESH 40-YEAR HIGH IN MAY WITH CONSUMER PRICES SURGING 8.6%
It marks the fastest pace of inflation since December 1981.
The president, from the Port of Los Angeles Friday, said fighting inflation is his "top economic priority," while, again, casting blame on Russian President Vladimir Putin’s war in Ukraine for the surge in prices.
"Today I'd like to speak about my top economic priority, fighting inflation," Biden said. "I understand Americans are anxious and they're anxious."
"We’ve never seen anything like Putin’s tax on both food and gas," Biden said.
The president said America "can tackle inflation from a position of strength, unlike any other country in the world," saying that every other country in the world "is getting a big bite and a piece of inflation—worse than we are, in the vast majority of countries around the world."
"But make no mistake about it, I understand inflation is a real challenge for American families," Biden said.
"Today’s inflation report confirm what America's already know—Putin’s price hike is hitting America hard," Biden said. "Gas prices at the pump, energy and food prices account for half of the monthly price increases since May."
Biden said his administration "could continue everything we can to lower the prices for the American people," but said it is "Congress" that "has to act."
"I'm doing everything in my power to blunt Putin's price hike and bring down the cost of gas and food," Biden said, touting his administration’s move to coordinate the release of global oil reserves to "boost supply" and to "keep prices from rising even more."
The president said his administration is continuing to work to bring down the cost of food and gas and "save families more money."
"My dad used to say it's all about the standard of living, how much you have left in the paycheck at the end of the month, how much is left to do the basic things," Biden said. "So if you add up all the things that people need just to do their—to do everything from take care of the kids, to turn the heat on, the air conditioning on and everything in between, there's a lot of ways we can reduce their cost, their cost of living."
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Biden said his administration has called for lowering prescription drug costs, which he said "would fundamentally affect the well-being of every family."
The Labor Department Friday said price increases were widespread: Energy prices rose 3.9% in May from the previous month, and are up 34.6% from last year. Gasoline, on average, costs 48.7% more than it did one year ago and 7.8% more than it did in April. In all, fuel prices jumped 16.9% in May on a monthly basis, pushing the one-year increase to a stunning 106.7%.
In another worrisome sign, shelter costs – which account for roughly one-third of the CPI – accelerated in May, climbing 0.6%. It marked the fastest one-month gain since 2004. On an annual basis, shelter costs have climbed 5.5%, the fastest since February 1991.
Food prices have also climbed 10.1% higher over the year and 1.2% over the month, with the largest increases in dairy and related products (up 2.9%, the biggest monthly increase since July 2007), non-alcoholic beverages (1.7%), cereals and bakery products (1.5%), and meats, poultry, fish and eggs rose (1.1%).
Scorching hot inflation has created severe financial pressures for most U.S. households, which are forced to pay more everyday necessities like food, gasoline and rent. The burden is disproportionately borne by low-income Americans, whose already-stretched paychecks are heavily impacted by price fluctuations.
Rising prices are eating away the strong wage gains that American workers have seen in recent months: Real average hourly earnings decreased 0.6% in May from the previous month, as the inflation increase eroded the 0.3% total wage gain, according to the Labor Department. On an annual basis, real earnings actually dropped 3% in May.
Rampant inflation has become a major political liability for Biden ahead of the November midterm elections, in which Democrats are expected to lose their already razor-thin majorities. Surveys show that Americans see inflation as the biggest problem facing the country – and that many households blame Biden for the price spike.
The hotter-than-expected report will also have major implications for the Federal Reserve, likely solidifying a series of aggressive rate hikes as central bank officials try to tame inflation. Policymakers already raised the benchmark interest rate by 50-basis points – double the usual size – in May and are expected to approve at least two more similarly sized hikes in June and July.
Republicans are seizing on the report, slamming the president and his administration, as well as Democrats, for the surge in costs for American families.
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"President Biden and Speaker Pelosi denied economic realities for 17 months, creating raging inflation. Americans don’t need to hear spin from Democrats that the economy is in a ‘historic place’ and ‘America is starting to feel more like itself again,'" House Minority Leader Kevin McCarthy told Fox News.
"The reality is that prices continue to increase at an accelerating rate, and Americans are paying $5.00 per gallon nationally despite Biden draining our strategic petroleum reserve by 1 million barrels per day," McCarthy continued. "Democrats must know that this is not the ‘incredible transition’ the president pretends it is, and yet they have no solutions to lower costs."
Fox Business' Megan Henney contributed to this report.