US inflation likely continued to accelerate in January, the White House warned on Wednesday in anticipation of backlash over bad numbers due to be officially released on Thursday morning.
Consumer prices rose 7% in 2021, their fastest pace in nearly four decades.
“We expect high year-over-year inflation in tomorrow’s data” Thursday, White House spokeswoman Jen Psaki said Wednesday. An inflation “above 7%, as some (economists) predict, would not be a surprise,” the official added.
Consumer Price Index (CPI) data for last month will be released at 13:30 GMT by the Labor Department.
For months now, President Joe Biden has promised to invert the price curve. The rise concerns all sectors of the economy and particularly affects the most modest households.
Even though the economic recovery continues with sustained growth higher than that of other countries in 2021, inflation casts a dark shadow on the economic outlook.
The Republican opposition estimates that this is a direct consequence of Biden’s economic policy, which managed to pass a gigantic emergency plan for 1.9 billion dollars through Congress.
Economists also pointed the finger at this massive and rapid injection into the economy that contributed to the rise in prices.
The price hike is also the result of a combination of factors linked to the pandemic, including problems in the supply chain, shortages of components and labor.
While price increases were particularly strong in used vehicles and energy, they also affect the food and rental sectors.
Many economists had expected the price rally to continue into the beginning of the year before moderating in the coming months as shortages fade and the US central bank, the Federal Reserve, raises interest rates.
“What we are looking at are recent trends,” Jen Psaki stressed, assuring that “increases are declining from month to month.”
In December, prices had risen less rapidly than in November, 0.5% versus 0.8%, especially as the rise in energy prices had slowed for the first time in months.
“Major forecasts continue to project that inflation should decline and moderate over the course of the year,” added Joe Biden’s spokeswoman.
However, a consensus of economists expects inflation to remain stable in January compared to December.
Excluding volatile food and energy prices, economists forecast monthly growth of 0.5%, slightly less than the 0.6% recorded in December.