Inflation continues to remain high, according to recent federal data released on Friday. These figures follow closely on the heels of other data indicating that the U.S. Gross Domestic Product fell short in the first quarter of this year.
The inflation and GDP data points have sparked concerns among economists and reignited criticism of President Joe Biden from Republicans.
According to Chris Zaccarelli, chief investment officer for Independent Advisor Alliance in North Carolina, the market needs to adjust its expectations regarding Fed rate cuts due to the high levels of inflation. Zaccarelli believes that this is the new normal for 2024 and that it is unlikely for the Fed to cut rates multiple times unless a recession occurs. He states, “Yes, they may cut once (or not at all), but there is no possibility the Fed is going to cut rates 3 or more times, unless we go into recession.”
According to the latest data from the U.S. Bureau of Economic Analysis, Personal Consumption Expenditure (PCE) increased by 0.3% in the previous month. This aligns with the findings of the federal Consumer Price Index, which also reported a 0.4% increase in prices during the same period. These figures indicate a rise in inflation rates.
On Friday, Jason Furman, a Harvard economist and former economic advisor during the Obama administration, took to X, formerly known as Twitter, to address the argument that elevated inflation is solely due to housing. He stated, “A lot of people have argued that elevated inflation is just because of housing and housing is lagged/inappropriate.”
He continued, “However, even if we exclude housing, it is important to note that recent inflation rates have been significantly higher.”
The latest inflation data follows recent federal data indicating a sluggish GDP growth rate of 1.6% in the first quarter of this year. This is significantly lower than the 3.4% growth rate seen in the previous quarter and falls short of experts’ predictions.
“New GDP figures have been released, revealing yet another disappointing quarter under the Biden administration,” lamented Richard Stern, a renowned analyst from the Heritage Foundation. “This disheartening news signifies a troubling trend, with the government’s growth outpacing that of the economy for the third consecutive quarter.”
According to him, the left-wing government’s actions can be seen as socialism in action, as they take advantage of everyone else’s resources and benefits, while the personal saving rate continues to decline dramatically, reaching less than half of what it was before the pandemic.
Republicans intensified their criticism of Biden in light of the latest economic data.
“Antisemitism is spreading unchecked across college campuses,” expressed U.S. Representative Elise Stefanik, a Republican from New York. She further emphasized the issue by stating that “illegal immigrants are crossing both borders, causing concerns about national security.” Additionally, Stefanik highlighted the rising inflation and its adverse impact on people’s finances, emphasizing the multiple crises that America is currently facing due to what she perceives as failed leadership under Joe Biden.
Under the Biden administration, there has been a significant increase in prices, with a rise of almost 20% since he took office.
“The American people and the economy are being robbed by President Biden’s excessive spending and higher taxes,” stated House Ways and Means Committee Chairman Jason Smith, R-Mo. He expressed concern over the rising costs of gas and groceries, which are putting a strain on family budgets and forcing Americans to choose between paying rent or buying a house. The latest GDP report reveals an economy that is struggling due to failed economic policies. As prices continue to rise and the Federal Reserve keeps interest rates at their highest levels in over 20 years, the American Dream is becoming increasingly out of reach for many families.”
Despite criticism, Biden has defended his economic accomplishments and highlighted other successes in the field.
In a recent statement, President Biden expressed his satisfaction with the current state of the American economy, highlighting its strength and consistent growth. He emphasized that since taking office, the economy has experienced more growth than in any other presidential term over the past 25 years. Additionally, he noted that the unemployment rate has remained below 4% for over two years, reflecting the stability of the job market.