White House officials went on the defensive this week in anticipation of another unappetizing report after continued months of soaring inflation.
Just one day before the White House was to release June’s consumer price index (CPI), President Biden’s top economic adviser sent out a memo that was designed to regulate the heightened public response to yet another month of record price jumps.
The CPI data will be released on Wednesday but National Economic Council Director Brian Deese reminds it will not largely reflect the “substantial declines in gas prices we’ve seen since the middle of June.”
In a five-page memo aimed at contextualizing the upcoming report, Deese notes gas prices have already slipped 5 percent from the last month’s average; the National average is now $4.68 a gallon. Memo co-author, and Council of Economic Advisers chair Cecilia Rouse comments that “gas prices can be expected to decline in the weeks ahead,” especially if wholesale prices remain as they are today.
Similarly, a White House official said that the higher known prices from June are already out-of-date in regard to where the market is, currently. In a conference call to reporters, this official advised the price is also out-of-date to what the average American consumer is currently experiencing.
While they are certainly not the only benchmark for inflation, gas prices are of particular interest because food and volatile energy prices have both been “heavily impacted” by the Ukraine conflict. Furthermore, they anticipate this impact will account for at least 40 percent of June’s CPI numbers.
This is important because core inflation seems to have slowed down a little. This measure strips out the more volatile factors—like, again, energy and food prices—and is operating at a 4.2 percent annualized rate for the quarter. This is already a drop from the 4.5 percent annualized rate for the first quarter. Also, this is down at least 6 percent from Q4 of last year.