Consumer prices jumped 8.6% year on year, from 8.3% last month, according to the Consumer Price Index (CPI) released Friday by the Labor Department. The rise reached 1.0% over one month after 0.3% in April.
“We must do more – and quickly” to slow inflation, Joe Biden said in a statement, recalling that it was his “economic priority”.
The president is due to deliver a speech on the matter at 1:45 p.m. (5:45 p.m.) from the Port of Los Angeles, where container ships loaded with Asian-made goods arrive.
“My administration will continue to do everything in its power to bring down prices for the American people,” he pledged, also calling on Congress – the US Parliament – to quickly pass legislation to prevent shipping carriers to inflate prices.
“It is also important that the oil, gas and refining industries in this country do not use the hardships created by the war in Ukraine as a reason to make matters worse for families with excessive profit taking or price increases”, further asserted the president.
“We all have our part to do to reduce inflation,” he said.
– Mid-term elections –
Housing, petrol, plane tickets, food, new and used cars, but also medical care, clothing, the increase was general. And this rebound has dampened hopes of a lasting slowdown in inflation, which began timidly in April.
These figures are bad for Joe Biden a few months before a crucial electoral deadline, which will see the renewal of a large part of the elected representatives of Congress.
The Republican opposition accuses the Democratic president of having an inflationary policy: “in Joe Biden’s America, basic necessities have prices of luxury items”, lamented in a press release the president of the Republican National Committee (RNC), Ronna McDaniel.
“The higher inflation numbers reflect a continued confluence of factors,” said Kathy Bostjancic, chief economist for Oxford Economics.
Supply difficulties, which began with the Covid-19 pandemic, have driven prices up around the world, a movement accentuated in the United States by a shortage of labor, while generous financial aid from the government stimulated demand.
The war in Ukraine has exacerbated the phenomenon, driving up gasoline and food prices.
Inflation compared to May 2021 is thus 34.6% for energy – the largest increase since September 2005 – and 10.1% for food – the largest increase since March 1981.
While Americans are very dependent on their car, and often favor fuel-guzzling models, gasoline prices are breaking new records every day, reaching an average of 4.986 dollars per gallon (or 4.55 liters) on Friday, against $3,073 a year ago (62%).
It even boosted requests for assistance for fuel shortages by a third in April, according to data from the AAA motorist association, quoted by the Washington Post.
– Risk of stagflation –
Excluding energy and food, so-called core inflation, however, was stable over one month, at 0.6%, and even slowed down over one year, to 6.0%.
This situation should convince the US Central Bank (Fed) to tighten its key rates further next week at its monetary committee meeting.
The institution is on the move, its main lever being to curb demand from consumers and businesses, via key rate hikes.
It has already raised them twice, by a quarter point and then by half a percentage point, to the range of 0.75 to 1.00%.
The fight against inflation could weigh on the US economy, even raising fears of a recession. Unemployment could rise again.
“Should we fear stagflation?”, that is to say a prolonged period of low growth and high inflation, asks Gregory Daco, chief economist of EY-Parthenon: “no, not in 2022 , but the risks will be much greater in 2023.”
