President Joe Biden hailed falling inflation as a strong sign for the economy, though the latest figures remain far higher than the Federal Reserve's target.
Inflation fell to 5% for the year ending in March, down by nearly half from its 9.1% peak last June. Biden took it as a strong sign for the economy as he tries to stick a soft landing coming out of policies established during the COVID-19 pandemic.
INFLATION DROPPED TO 5% IN YEAR ENDING IN MARCH, LOWEST SINCE SPRING 2021
"Today’s report shows continued progress in our fight against inflation with the 12-month inflation rate at the lowest level since May 2021," Biden said in a prepared statement. "This progress follows last week’s news that our job market remains historically strong."
Gas prices are down $1.40 from last summer, the president noted, and grocery prices fell "for the first time since September 2020."
"In recent months, we have also seen price declines for items like used cars, smart phones, and other electronics," the president said. "While inflation is still too high, this progress means more breathing room for hard-working Americans — with wages now higher than they were 9 months ago, after accounting for inflation."
Inflation fell by nearly a full percentage point last month, according to the Bureau of Labor Statistics, reaching its lowest level since May 2021. However, the Fed wants to see inflation fall to 2% and may continue hiking interest rates to reach that goal. Inflation stood at 1.4% the month Biden took office.
The details in Wednesday's report suggest that underlying inflationary pressures remain strong. Much of the decline in the inflation rate was attributable to energy prices falling by 3.5%. But oil prices have risen significantly since March.
The Republican National Committee released its own statement pointing to falling real wages, which remain negative, if barely so.
"Today’s Consumer Price Index marks the 23rd straight month inflation has been at or above 5%, and the 24th straight month of negative real wages," RNC spokesman Tommy Pigott said. "It’s why poll after poll shows Americans disapprove of Joe Biden’s economy."
Biden's statement pointed to actions that cap insulin costs at $35 a month for seniors and his efforts to boost manufacturing in the United States.
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He also took the opportunity to lash out at Republicans.
"We must reject reckless proposals from Congressional Republicans to take our economy hostage in order to cut taxes for the wealthy and large corporations, and bring back failed trickle-down policies that would ship jobs overseas and gut programs that are lowering costs for seniors, middle-class families, and hard-working Americans," Biden said.