Biden sees inflation easing, despite prices still on the rise

President Biden asserted that inflation is easing, even as the Labor Department Wednesday reported prices rose in July versus the prior month, and versus July 2020.

Biden maintained that the Federal Reserve will take "appropriate action if and when it is needed."

The president, giving remarks on his Build Back Better economic plan, addressed the U.S. Labor Department’s Wednesday report that consumer prices rose 5.4% year over year in July, matching the prior month’s gain as the fastest since August 2008. 

CONSUMER PRICES RISE 5.4% ANNUALLY IN JULY

"Our experts believe, the major independent forecasters agree as well, that these bottlenecks and price spikes will reduce as our economy continues to heal," the president said Wednesday. "And while today’s consumer price report points in that direction, we will keep a careful eye on inflation each month and trust the Fed to take appropriate action if and when it’s needed."

The president announced Wednesday that he has directed his administration to "crack down" on players in the economy that are "keeping prices higher than they need to be."

"Take your grocery bill. When big agricultural operations consolidate, they put a squeeze on small and family farms, making them pay more for seed, paying them less for what they produce, and raising prices on what your groceries, what you pay for your groceries at the grocery store," Biden said. "My executive order opens up competition in the agricultural business, gives more farmers a chance to compete, which will give Americans more food choices at lower cost." 

The president also said the administration is taking action to address gas prices, adding that the prices currently "are lower than they were early in this decade, but they’re still high enough to create a pinch on working families." 

The president pointed to the $1 trillion infrastructure package that the Senate passed this week, vowing that he has made "absolutely clear that I would not raise gas taxes." 

"But that's not enough. Recently, we've seen the price that oil companies pay for a barrel of oil began to fall, but the cost of gasoline at the pump for more American people hasn't fallen," Biden continued. "That’s not what you'd expect in a competitive market. I want to make sure that nothing stands in the way of oil price declines, leading to lower prices for consumers." 

The president said he has tasked the National Economic Council with asking the chair of the Federal Trade Commission to "use every available tool to monitor the U.S. gasoline market and address any illegal conduct that might be connected, might be contributing, to price increases at the pump while the cost of barrel oil is going down." 

CAR PART PRICES ARE HEADING HIGHER

The Labor Department report showed prices increased 0.5% last month, slowing from June’s 0.9% increase. Analysts surveyed by Refinitiv were expecting a 0.5% gain. Core prices, which exclude food and energy, rose 0.3% month over month and 4.3% annually. In June, core prices increased 0.9% and 4.5%, respectively. 

Prices for shelter, food, energy and new vehicles all increased in July. The food index rose 0.7% while the energy index rose 1.6%, buoyed by a 2.4% gain in gasoline prices. 

Used car prices rose 0.2% in July, far less than the 10.5% spike in June. In the last report, used car price gains accounted for more than one-third of the increase. 

The president, though, closed with an optimistic tone, saying we "brought this economy back from a cold start and there are going to be some ups and downs, but I am committed to making sure that our historic economic recovery reaches everyone this time – reaches everyone and eases the burden on working families. Not just this year, but for the years to come." 

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Meanwhile, the Federal Reserve has insisted the recent price gains are "transitory" and that those increases will mitigate once production issues are resolved. 

Fed Chairman Jerome Powell has admitted that timing is uncertain.

"The Fed should consider this as yet more evidence of 'substantial' progress toward their goals, and surely a deep-dive discussion into tapering will be on the top of their agenda at the September FOMC meeting," said Seema Shah, chief strategist at Principal Global Investors. 

FOX Business' Jonathan Garber contributed to this report.