(The Center Square) – President Joe Biden came under fire from Republican lawmakers and economists Thursday after newly released inflation data showed consumer prices continued to rise in September.
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“President Biden and [Pennsylvania Gov. Tom Wolf] can congratulate themselves for spending hundreds of billions of dollars to reward their political allies, but the average family sees right through the ill-named Inflation Reduction Act,” said Nathan Benefield, senior vice president of the Pennsylvania-based Commonwealth Foundation.
Wages have failed to keep up with that rise in inflation, and a recent report from the Dallas Federal Reserve Bank showed that Americans have seen the “most severe” pay cut in 25 years because of higher prices.
“Since President Biden took office, real wages have fallen, while the cost of living in Biden’s America has skyrocketed,” said E.J. Antoni, economic expert at the Heritage Foundation. “Prices have risen so much that the average worker has lost the equivalent of $3,000 in annual income since January 2021. This inflation is the direct result of the Federal Reserve printing money to finance the prodigal spending sprees of a reckless Congress and White House.”
Critics pointed out the inflation increase comes after the Inflation Reduction Act passed and the Federal Reserve enacted several aggressive rate hikes that hurt the economy and sent stocks tumbling but were meant to curb inflation.
“Imagine hiking rates like mad and showing zero progress on inflation,” said Sven Heinrich, market expert and founder of Northman Trader.
Those rate hikes have major implications for the economy and regular Americans.
“Now that the Fed is finally raising interest rates, borrowing costs are increasing dramatically, with interest rates on mortgages doubling over the last few months,” Antoni said. “Interest rates on everything from credit cards to auto loans have increased, costing the average American around $1,200 in annual income compared to January 2021.”
The costs are hitting small businesses hard, with new polling showing that struggling small businesses cite inflation as their biggest problem.
“President Biden’s policies are a key source of inflation,” Karen Kerrigan, president and CEO of the Small Business Entrepreneurship Council, said after the data was released Thursday. “The hyper-regulatory agenda and regulatory threats being pursued across all sectors – from technology to energy, the financial sector and more – as well as intrusive and costly rules governing the workforce and many critical areas of our economy, are making a horrible inflation situation much worse.”
The wave of criticism comes after the U.S. Bureau of Labor Statistics released data showing both consumer and producer prices rose 0.4% in September and more than 8% in the last 12 months. Some items, like groceries and energy, saw a much larger increase in the past year.
Biden and Democrats have defended their work on the economy, pointing to the low unemployment rate and the rapid recovery from the pandemic.
“Today’s report shows some progress in the fight against higher prices, even as we have more work to do,” Biden said in a statement. “Inflation over the last three months has averaged 2%, at an annualized rate. That’s down from 11% in the prior quarter. But even with this progress, prices are still too high.”
Biden has stressed that inflation is high around the world and blamed the war in Ukraine while downplaying the role of U.S. spending and money-printing.
“Fighting the global inflation that is affecting countries around the world and working families here at home is my top priority,” Biden said.
“If Republicans take control of Congress, everyday costs will go up – not down,” he added.
On Twitter, a May analysis from Morgan Stanley resurfaced in which the company blamed rising prices on the “excessive fiscal stimulus provided during the pandemic,” in particular the $1.9 trillion federal spending bill in 2021.
Republican lawmakers joined in on that criticism of federal spending, pointing out inflation was much lower during the previous administration.
“High prices are not transitory – they have become entrenched in our economy. In under two years, Democrats have taken us from nonexistent inflation to a 40-year record-high,” said U.S. Sen. John Barrasso, R-Wyo. “Too many Americans are living the nightmare of having to choose between buying gas they can’t afford, buying groceries they can’t afford, and paying energy bills they can’t afford.”
Other Republicans called for a balanced budget and stressed the difficulty Americans are facing to make ends meet.
“While hundreds of thousands of Floridians are working hard to recover from Hurricane Ian, today’s CPI report is an infuriating reminder that Joe Biden’s raging inflation is still crushing families across the Sunshine State,” said U.S. Sen. Rick Scott, R-Fla. “Biden’s inflation causes pain for families every day, but in the aftermath of a devastating hurricane, high prices are a hurdle that families in our state shouldn’t have to deal with.
“If President Biden truly cares about helping Floridians, he’ll stop recklessly wasting tax dollars on a failed, woke agenda, refocus his administration on the core responsibilities of the federal government and demand a balanced budget to finally end his inflation nightmare,” he added.
Jason Furman, Harvard economist and former economic advisor for then-President Barack Obama, said September could be the “peak” of inflation.
“Todays’s report was probably ‘peak’ inflation for the core CPI,” Furman wrote on Twitter. “I’ve thought that before but third time’s the charm. The question, however, is what does inflation fall to. There are a lot of numbers lower than 7% but still higher than 2% or 3%.”