President Joe Biden acknowledged Friday morning there is "more work to do" after inflation unexpectedly rose in January.
As measured by the gauge favored by the Federal Reserve, inflation rose to 5.4% annually last month, reversing a downward trend that began in midsummer.
INFLATION ROSE TO 5.4% IN JANUARY, ACCORDING TO KEY GAUGE WATCHED BY FED
"Today’s report shows we have made progress on inflation, but we have more work to do," Biden said in a statement that emphasized the positives. "Annual inflation in January is down from the summer, while the unemployment rate has remained at or near a 50-year low and take-home pay has gone up."
The rise in the personal consumption expenditures price index reported Friday morning by the Bureau of Economic Analysis is another sign that inflationary pressures are not abating in the face of the Fed's campaign to slow price gains by hiking interest rates. Inflation is still running much hotter than the central bank’s 2% target and damaging household purchasing power.
The headline figure is bad news for the economy and for Biden, who had been counting on a continuation of the recent trend of disinflation.
Biden's statement also pointed to gas prices that have fallen $1.60 per gallon on average since last summer but acknowledged the report was a "setback" while lashing out at Republicans.
"We face global economic challenges from a position of strength," he said. "And I will not allow my Republican friends in Congress to undermine that strength. Some of them have supported raising costs through a repeal of the Inflation Reduction Act, cutting taxes for the wealthy and large corporations, cutting critical programs that American seniors and families count on, or taking the full faith and credit of the United States hostage."
The president said he sees optimism as he travels the country from families with "just a little more breathing room" thanks to job growth since he took office.
Still, high inflation will continue dogging Biden's presidency for as long as it persists and presents the threat of a recession if the Fed cannot get inflation under control without continuing to spike interest rates.
The Republican National Committee released its own statement saying inflation is getting worse and pointing a finger at the White House.
"This is bad news for American families," said RNC spokesman Tommy Pigott. "Now, like anytime Biden gets bad news, watch him first try to brag about it and then blame someone else."
The markets reacted immediately to Friday's pop in inflation. Futures of the Dow Jones Industrial Average fell by nearly 400 points, while the Nasdaq composite was down by 1.75% following the news.
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"The fight is not over," Biden said. "We must finish the job in transitioning to stable and steady growth that benefits all Americans, while laying the foundation for strong and shared growth for years to come."