While White House officials are maintaining public caution about the positive economic signals the administration has received over the past month, many are slowly relaxing behind closed doors in the belief that inflation is finally cresting.
President Joe Biden was quick to celebrate the “zero” month-over-month inflation reported for July 2022, and while the consumer price index still rose 8.5% compared to the year prior, the Democrats felt they had plenty to celebrate.
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Meanwhile, the economy added 528,000 jobs in July, and gas prices steadily decreased for the entire summer, with the national average currently hovering around $3.85. The personal consumption indicator, the preferred inflation metric of the Federal Reserve, additionally dropped half a percentage point on Friday compared to the month prior for the year ending in July.
Multiple White House officials and senior Democratic aides told the Washington Examiner that, while it’s impossible to predict fully when prices will begin retreating to pre-2021 levels, “it feels like we’re in a really good place.”
“Americans have been through a lot over the past year, but the work the president and congressional Democrats have done are resulting in real, cost-saving solutions for all families,” one White House official stated. “We’re optimistic about the economy heading into the fall but realistic about the work that still needs to be done.”
“I don’t think anyone expects that we are home free on the economy or inflation or that election night in November will be an especially great moment for us,” one White House source similarly told Politico. “But we knew the tide was going to turn at some point on prices.”
Two White House officials and one senior congressional Democratic aide also acknowledged economic progress in recent months but told the Washington Examiner that the White House will “never” publicly set a “deadline” for inflation ending after totally missing projections in 2021.
“I think the whole ‘transitory’ business has the White House scared,” the congressional aide explained. “The signs are all there, but the president is finally trending in the right direction, and with the midterms on the horizon, there’s no point in trying to call this thing before we’re 200% sure prices are falling.”
Biden’s approval rating has slowly ticked up back toward 50% in recent months. The RealClearPolitics polling average currently shows 42% of respondents giving Biden positive marks, but the public has been slow to change its overall outlook for Biden’s economic stewardship.
Despite the private confidence, government officials have largely avoided suggesting in public that the current inflation is definitely coming to an end anytime soon.
Fed Chairman Jerome Powell delivered an extremely hawkish speech in Jackson Hole, Wyoming, on Friday that suggested the federal government will continue raising interest rates to combat rising prices forcibly.
Asked about that speech at Friday’s White House press briefing, National Economic Council Director Bharat Ramamurti told reporters that Biden will continue “to let the Fed do its work.”
“Our focus here is to support households, keep our eye on the ball on inflation, and hopefully come out the other side with a — with steady and stable growth, which is what the president has said is his goal,” he explained.
Biden himself responded to the PCE numbers on Friday by declaring that the government still has “more work to do.”
“We have to help families who have been squeezed by decades living paycheck to paycheck,” he wrote in a statement. “But today confirms that our economic plan is building the economy from the bottom up and the middle out and we are making progress.”
“This is important. It’s important for the president,” White House press secretary Karine Jean-Pierre told reporters Monday when asked about the state of the economy. “We have more work to do. We understand that. We know that there are families in America who are still feeling the pain, and we’re going to continue to do the work.”
Still, there are signs that inflation across the globe will drastically slow through the end of the year. Oil futures have fallen over 20% since the summer, the U.N. food index saw prices fall 9% in July, the largest drop since 2008, and international supply chain kinks, caused by the war in Ukraine and the pandemic, have been greatly eased in recent months.
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JPMorgan Chase & Co. additionally predicted over the weekend that CPI will fall to 5.1% by the end of the year, with the bank’s chief economist, Bruce Kasman, claiming that “the inflation fever is breaking.”
