December 9, 2021, 4:33 PM EST
Deese says November report won’t show recent price declines
Consumer Price Index seen increasing 6.7% from a year earlier
White House economic adviser Brian Deese said November’s inflation report won’t account for recent declines in the cost of energy and commodities, an effort by the Biden administration to downplay data that is sure to show a surge in consumer prices.
Deese said that the Consumer Price Index report to be released Friday is “backward looking” and won’t capture “recent price movements” in gasoline and natural gas prices, as well as declines in shipping costs and commodities.
“These declines are delivering most importantly some benefit to consumers on a go-forward basis that won’t be reflected in that data,” Deese told reporters at the White House on Thursday.
His comments ahead of the report underscored concern within the administration that consumer costs are weighing heavily on the president’s approval rating, and pose a significant political risk for Democrats in next year’s midterm elections.
The widely followed CPI gauge probably increased 6.7% from November 2020, according to the median projection in a Bloomberg survey of economists. Compared with a month earlier, prices are seen rising 0.7%. That would be the highest rate since the early 1980s, under President Ronald Reagan and in the lifetimes of many Americans.
President Joe Biden’s standing has suffered as concern over the economy has spiked in recent months, with just 40% of Americans approving of his handling of his job in a Monmouth University poll released Wednesday. Around three in 10 Americans said every day bills or inflation is the biggest concern facing their family, greater than other issues, including the pandemic.
Deese said Thursday that inflation had increased to “the level that we’re seeing hit American families and their pocketbooks.” But the White House has argued that Americans’ overall financial picture is improving.
Deese said Thursday that household income for the typical American family is higher, even accounting for inflation, thanks to new tax credits and increasing wages. Inflation could wane as supply bottlenecks improve and pressure points ease, he said. And CPI reports are measured year-over-year, meaning that increases are relative to prices in the depths of the pandemic, when many Americans had pulled back on spending.
“The consensus estimates of outside experts continue to forecast and predict that price increases will moderate going into 2022,” Deese said.
Still, Deese acknowledged a risk “that price increases become entrenched long term” and declined to predict if inflation would hit a peak in November’s report.