The one-year anniversary of the attack on the Capitol in Washington, U.S., will be delivered by President Joe Biden.
The new consumer inflation report was trumpeted by the president as proof that price jumps have started to slow, but he acknowledged that the economy has a ways to go before Americans see cost hikes return to a typical level.
The president said that the report shows that we are making progress in slowing the rate of price increases.
The report underscores that we still have more work to do, with price increases still too high and squeezing family budgets.
The Labor Department said that Americans paid more for goods and services in December. The year-over-year inflation jump was the hottest since 1982.
Many economists think that Biden's remarks show that inflation appears to be peaking. The Labor Department reported that prices rose in August, 0.4% in September, 0.9% in October, and 0.8% in November.
The lofty year-over-year jumps would ease should that trend continue.
The rate of price increases is falling, which does not mean that prices are declining. The Federal Reserve has a 2% inflation target.
Many Americans cannot afford to buy as much gasoline, grapes, used cars, and haircuts as they did a year ago, because of price spikes without similar increases in consumers' wages. Voters feel their purchasing power erodes when inflation is high.
The Labor Department said that real average hourly earnings rose from November to December. They fell from the previous year.
The current bout of inflation has been caused by the Covid-19 pandemic according to most economists. The global supply chain has not been able to keep up with demand for goods among consumers and businesses.
Lawmakers voiced their complaints about inflation to Powell during his nomination hearing. Powell was chosen by Biden to lead the central bank for a second term.
The Fed chair told lawmakers that they expect some help from the supply side in checking inflation. Powell said the Fed would hike interest rates this year.
Corporate efforts to hire workers have been undermined because of the Pandemic. Voters will give Biden poor marks for his handling of the economy if inflation continues to rise, which will make it hard for Democrats to win the key midterm elections in 2022.
On Wednesday, the president acknowledged those feelings.
He said that inflation appeared in virtually every developed nation as it emerged from the economic slump. Thanks to the American Rescue Plan, America is one of the fastest growing economies, which allows us to address price increases and maintain strong, sustainable economic growth.
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