National Economic Council director Brian Deese and Council of Economic Advisers chair Cecilia Rouse on Tuesday said in a memo shared with CNN that “market expectations are that headline CPI will be elevated in June” as Americans continue to grapple with high energy and food prices. But they argued the June CPI data would “largely not reflect the substantial declines in gas prices we’ve seen since the middle of June.”
“Gas and food prices continue to be heavily impacted by the war in Ukraine. And there are a few important points to keep in mind when we get this backwards-looking data. First, June CPI data is already out of date because energy prices have come down substantially this month and are expected to fall further,” Jean-Pierre said during a press briefing.
The national average for a regular gallon of gas has fallen to $4.684, about 30 cents cheaper than it was a month ago when it was $4.986 according to AAA. The group said in a news release last week that the drop is due to falling oil prices.
As the White House struggles to contain rampant inflation, it continues to blame high gas and grocery prices on Russia’s ongoing invasion of Ukraine, which has been taking place since February. However, gas prices and inflation had been rising even before Russian troops crossed into Ukraine.
The high prices are putting strain on millions of American families, caused Biden’s approval ratings to drop and have raised questions about whether the nation is headed toward a recession.
But officials point to the June jobs report as a sign the US may not be headed for a recession.
“Our economy created 372,000 jobs in June, in line with the monthly average in the rest of the second quarter. Simply put: This is not what a recession usually looks like,” Deese and Rouse wrote in the memo.
In an attempt to control inflation, the Federal Reserve last month increased its benchmark interest rate by three-quarters of a percentage point — the biggest single hike since 1994. This came after the Fed raised its rate by half a percentage point in May, which was the biggest increase in 22 years.