Report Shows Biden Economy Surging Despite GOP Sabotage

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Per newly available federal data, inflation in July was lower than economists expected, and the stock market jumped in value by significant levels on Wednesday.

The Consumer Price Index, a measurement that reflects inflation, indicated in July there was no rise in prices at all compared to the previous month, although the year-over-year rise was 8.5 percent, meaning prices stood that much higher than the level of 12 months ago. As reported by CNBC, economists polled by Dow Jones were expecting a year-over-year increase of 8.7 percent, and a month-to-month spike of 0.2 percent. The year-over-year reading from June indicated a spike in prices of 9.1 percent, so prices in July didn’t jump as much compared to the year prior. Another measurement — core inflation, eliminating prices for volatile commodities including food and energy — also reflected what CNBC called a “smaller-than-expected” increase in prices in July. The month’s year-over-year price growth in that category was 5.9 percent.

Overall month-to-month inflation in June was 1.3 percent, meaning July saw a significant drop-off in price increases compared to the previous month. The lack of month-to-month growth in the main overall measurement of inflation was connected to falling prices for gas, airfare, and used cars, although prices for food and rent continued climbing. The month-to-month level of core inflation in July, stripping away food and energy from the calculations, was 0.3 percent. In June, core inflation was 0.7 percent compared to the prior month. As for the stock market, the Dow Jones Industrial Index was up over 500 points, or over 1.5 percent, by late Wednesday morning. The S&P 500 reached a high not seen since early May, and Nasdaq Composite was up by over 2 percent. Individual, high-profile stocks were also substantially climbing on Wednesday, with Salesforce, the best-performing company in the Dow, up by 3.5 percent.

As prices rose, the Federal Reserve moved in with interest rate hikes in an attempt to tamp down some of the economic pressures driving inflation. An interest rate hike could force down demand as supply chains struggle to meet consumers’ levels of interest, although high demand isn’t the only economic development pushing inflation forward. Independent supply chain issues were also at fault, a problem partly addressed by legislation President Biden signed this week to provide substantial federal financial support for the domestic production of a key technological component called semiconductor chips, which are used in a wide variety of products. A shortage of those chips unfolded in connection with overall rising prices. Other continuing pressures on prices, like the war in Ukraine, are well outside the federal government’s potential control.

The Senate also recently approved a sweeping legislative initiative Democrats called the Inflation Reduction Act, which, among other components, includes new safeguards for the costs incurred by those on Medicare. For the first time, Medicare will be able to negotiate over the costs of certain prescription medications, and there’s an accompanying limit of $2,000 a year planned for the costs individuals on Medicare pay for prescriptions. Neither component of the plan takes effect right away. Healthcare services, as could be expected, are among the areas of the economy seeing price increases.