President Biden came under fire Monday for downplaying decades of inflation and other problems during a “60 Minutes” interview, with critics accusing the president of losing touch with economic reality.
During the sit-down interview, Mr. Biden insisted the monthly inflation rate had “barely” risen.
“We’re in a position where it hasn’t gone up in the last few months, it’s just close, it’s been basically even. And in the meantime, we’ve created all of these jobs,” Biden said.
A Labor Department report last week showed annual inflation was 8.3% in August, up 0.1% from July. However, many economists were forecasting a fall in inflation in August, and the surge sparked a sell-off in equities, with all three major US markets posting their worst day in two years.
While the July-August increase was small, it is not true that inflation rose “nearly” in 2022. For example, prices had risen 9.1% in June, the largest year-on-year increase since 1981.
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In January, consumer prices rose at an annual rate of 7.5%, but since then they have exceeded 8% every month.
“Prices are up 8.3% across the board and that’s inflation by a mile,” said Joel Griffith, economist at the Heritage Foundation. “I think American families who hear him say inflation has slowed are struggling because wages are not keeping pace with inflation rates.
A survey released last week by Bankrate, a consumer finance firm, found that 55% of workers say their income hasn’t kept pace with rising commodity prices. Among those surveyed, 39% of workers said they have not received a raise in the last 12 months and are having a harder time keeping up with inflation.
Mr. Biden told 60 Minutes that energy prices are lower and costs will start falling because his massive tax, spending and healthcare bill will drive down drug prices.
“I am telling the American people that we will get inflation under control. And their drug prices will be a lot lower. Your healthcare costs will be much lower. Their basic costs for everyone, their energy prices will be lower. They’re going to get into a situation where they start to regain control,” he said.
Mr Biden later said the price of gas and other energy costs had fallen.
Although gas prices have fallen since hitting a record $5 a gallon in June, they remain significantly higher than this time last year. Gasoline was $3.67 a gallon as of Monday afternoon, up 15% from $3.19 the same day last year, according to data from AAA.
Mr Griffith said the drop was artificial, fueled by lower demand amid record prices and a looming recession. Data from the Energy Information Administration last week showed that gas demand fell to 8.5 million barrels a day from 9.3 million a week earlier. That’s the lowest demand since July 2020, when COVID restrictions put fewer drivers on the road.
For prices to really come down, the US needs to increase supply to meet long-term demand, Mr Griffith said, and not just while demand falls.
“Gas prices aren’t going down because we’re increasing supply, they’re going down because we’re in a recession and demand is falling,” he said. “We want prices to go down because we’re increasing production.”
But even as gas prices fall, the cost of other household goods has risen. The price of eggs has risen nearly 40% since August 2021, while the price of margarine is trailing closely with a 38% jump over the same period, according to the Bureau of Labor Statistics (BLS).
Transport costs have also risen, with public transport costs up more than 20% since August 2021 and tire prices up 14% over the same period, according to the BLS.
Mr. Biden also boasted about his job-creation skills to 60 Minutes, saying his government had created 10 million jobs, including 685,000 in manufacturing. Last month, Mr. Biden credited those jobs to his America’s bailout spending bill, which aimed to boost the US economy in the wake of the COVID-19 pandemic.
Data from the Federal Reserve Bank of St. Louis shows that between April 2021 and August 2022 the US economy posted a net increase of around 8 million jobs, down from the 10 million jobs Mr Biden touted.
But there’s also no evidence linking the job gains to Mr. Biden’s policies. A study by the Congressional Budget Office released in February 2021 concluded that even without America’s bailout, employment would increase by 6.25 million jobs in 2021 and 1.74 million in 2022. That’s because jobs returned as businesses reopened after COVID-19 shutdowns.
“We’ve seen millions and millions of jobs lost to government-imposed shutdowns and now those jobs are coming back because the government is allowing businesses to reopen,” Mr Griffith said. “President Biden isn’t getting credit because people are being told they can run their business now.”
BLS data shows that a lower percentage of workers are employed today than before the pandemic, meaning several million workers are still not back on the job.
Republicans seized on Mr. Biden’s comments, calling them unmusical.
Jonathan Turcotte, a spokesman for the Republican Senate National Committee, urged every Senate Democrat, including those up for re-election this year, to look into Mr Biden’s inflation claims.
“Do you agree that record inflation needs to be put into perspective? Hard-working Americans who can’t afford gas and groceries certainly don’t agree. This type of patently false and ignorant statements by Joe Biden is only possible because he knows that no vulnerable Democrat in the Senate has the guts to stand up to him,” Mr Turcotte said in a statement.
Mr. Biden also turned heads during the interview when he declared the COVID-19 pandemic was over.
“The pandemic is over,” he said in an interview. “We still have a problem with COVID. We’re still working hard on that. It is – but the pandemic is over.”
But research shows Mr Biden’s comments could be premature. The Centers for Disease Control and Prevention shows that there are hundreds of COVID-19 deaths every day and that about 14,000 Americans have died from the virus in the past month.
According to the CDC, an additional 60,000 Americans are testing positive every day. While not as high as the 129,000 Americans who tested positive per day on average during the summer, it is higher than the average of 25,000 recorded in the spring.
Even Mr. Biden’s own COVID response coordinator, Dr. Ashish Jha, earlier this month, denied claims that the pandemic was over.
“The pandemic is not over yet,” said Dr. Jha during a White House briefing on Sept. 6. “And we will remain vigilant and of course continue to look out for and prepare for any unforeseen twists and turns.”