President Biden argued on Tuesday that his economic policies are working after a Labor Department report showed inflation cooled down considerably in November.
Prices rose 7.1% in November compared with a year earlier, down from the 7.7% increase recorded in October, according to the Labor Department’s Consumer Price Index.
“This provides some reason for optimism for the holiday season and, I would argue, for the year ahead,” Mr. Biden said from the White House. “In a world where inflation is rising in double digits in many major economies around the world, inflation is coming down in America.”
He added, “What is clear is that my economic plan is working, and we are just getting started. My goal is simple: Get prices increases under control without choking off economic growth.”
November’s rate marks the fifth straight month of lower price increases and landed below economists’ expectations of a 7.3% increase. The 7.1% rate is the lowest increase since December 2021.
Mr. Biden said these numbers are evidence that the worst of inflation has passed. However, he acknowledged that inflation remains high and more work needs to be done to bring prices down.
“It’s going to take time to get inflation back to normal levels as we make the transition to more stable and steady growth,” he said. “We could see setbacks along the way as well. We shouldn’t take anything for granted.”
When asked if he expected prices to go back to normal, Mr. Biden demurred.
“I can’t make that prediction. I am just convinced they are not going to go up,” he said.
The increase from a year ago is well above the Federal Reserve’s 2% target for a healthy inflation level. Republicans quickly seized on the fact that prices remain significantly higher than last year under Mr. Biden’s watch.
“As a result of Democrats’ reckless spending, Americans will pay more this year to put gifts under the tree, heat their homes and feed their families. Democrats don’t care about the burden their agenda has placed on families,” said Republican National Committee Chairwoman Ronna McDaniel.
After excluding food and energy prices, consumer prices climbed by 6% compared with November 2021, less than the 6.1% that Wall Street analysts projected.
Stocks rose following the report, with the Dow Jones Industrial Average and Nasdaq each up around 200 points Tuesday morning.
The report showed that falling energy prices helped contain inflation as the energy index declined 1.6% for November due to a 2% drop in gasoline prices.
Used vehicle prices, which were a major contributor to inflation last year, dropped by 2.9% from October to November and down 3.3% compared with one year ago.
Food prices, however, increased 0.5% and were up 10.6% from a year ago.
The CPI report comes as Federal Reserve officials gather in Washington to discuss the next steps to reduce soaring prices. Fed policymakers are set to announce their latest interest rate decision on Wednesday and are widely expected to raise rates by half a percentage point.
Inflation spiked in mid-2021 as the result of several factors, including a supply and demand imbalance caused by the COVID pandemic, Russia’s invasion of Ukraine, a stalled supply chain, choking domestic energy and trillions of dollars in fiscal and monetary stimulus policies that spurred an abundance of money chasing too few goods.