The torrid pace of US inflation may have eased slightly in May, but prices have remained high to the detriment of Americans' wallets, sending President Joe Biden and the Federal Reserve racing to help.
Consumer prices in the world's largest economy have soared by the fastest pace in more than four decades, with gas prices at the pump hitting new records daily amid the fallout from Russia's invasion of Ukraine as well as ongoing supply chain challenges due to the Covid-19 pandemic.
Biden, whose popularity has taken a hit as prices surge, has made fighting inflation his top domestic priority, but is finding he has few tools to directly impact prices.
"Inflation is the bane of our existence," Biden acknowledged in an interview Wednesday with late-night television host Jimmy Kimmel.
The Labor Department is set to release the May consumer price index (CPI) data on Friday, which analysts expect will show a slightly higher monthly increase than in the prior month, but potentially saw a modest slowdown in the torrid annual pace.
US consumer prices jumped 8.3 percent in the 12 months ending in April, and though economists say the rate probably peaked in March at 8.5 percent, it is likely to remain high for months to come, something the White House has acknowledged.
"We estimate the 12-month change in overall CPI eased only slightly" to 8.2 percent, said Rubeela Farooqi of High Frequency Economics.
Sam Stovall of CFRA expects the rate slow to 8.1 percent but warned further declines are likely to be "glacial."
However, a consensus forecast sees the rate holding steady at the 8.3 percent the pace seen April.
Biden has tried to hammer home his optimistic message about the economic progress in the wake of the pandemic, including rapid GDP growth and record job creation, while pressing Congress to take action to lower costs on specific products, and go after firms such as shipping companies that are taking advantage of limited competition to impose steep price hikes.
"We have the fastest-growing economy in the world," he said. "That's allowed us at least to stay on top of and a little bit ahead of what's happening around the world."
- Inflation remains 'elevated' -
The United States has come roaring back from the economic damage inflicted by the Covid-19 pandemic, helped by bargain borrowing costs and massive government stimulus measures.
But with the pandemic still gripping other parts of the world, global supply chain snarls have caused demand to far outstrip resources. Meanwhile, the conflict in Ukraine has sent global oil prices above $100 a barrel.
The Federal Reserve has begun raising interest rates aggressively, with another big hike expected next week, as policymakers attempt to combat inflationary pressures without triggering a recession.
The White House acknowledged inflation is likely to remain "elevated" in May, though Press Secretary Karine Jean-Pierre said Wednesday the administration continues "to believe the economy can transition from what has been a historic recovery... to stable steady growth."
In a video posted on Twitter on Thursday, Biden urged Congress to pass a bill aimed at easing the cost of shipping containers to US ports, which in turn would bring down prices.
The bill passed the Senate in March, and the House of Representatives is set to vote on the legislation next week.
Another step Washington could take is to lift some of the punitive tariffs Biden's predecessor Donald Trump imposed on China, which supporters argue would help ease price pressures by making imports cheaper.
Treasury Secretary Janet Yellen told lawmakers Wednesday that such a move was under "active consideration" and the administration would provide more information in "in coming weeks."