Psaki predicts even worse inflation report after 40-year high

Psaki predicts even worse inflation report after 40-year high

White House press secretary Jen Psaki predicted a brutal spike in inflation when new federal data is released Thursday — and said Russian President Vladimir Putin was to blame, despite an already-upward trajectory.

The federal Consumer Price Index found the average cost of goods and services was up 7.5 percent in January versus one year prior — the highest figure in 40 years, dashing White House predictions that the figure would begin to fall.

The new data will gauge the cost of goods in February — most of which preceded Putin’s invasion of Ukraine on Feb. 24 and the subsequent spike in gas prices.

“We don’t have the data at this point yet. But as we’re looking ahead, we certainly assess that we expect to see high headline inflation in tomorrow’s February inflation data. A key reason as you touched on are energy prices,” Psaki said Wednesday at her regular briefing.

“We’ve seen the price of gas increase, as I noted, 75 cent since the beginning of the year as Putin built up his military near Ukraine and took increasingly aggressive measures that were felt in the markets,” she added.

White House press secretary Jen Psaki answers questions during the daily briefing on March 09, 2022.
White House press secretary Jen Psaki answers questions during the daily briefing on March 09, 2022.
Win McNamee/Getty Images

“We also expect some increases in pandemic affected sectors given our strong recovery from Omicron in February. That’s a positive sign for our economy and for Americans who are going out again, traveling, going to restaurants and getting back to normal. And we also expect to see continued moderation in used car prices.”

But Fox News correspondent Peter Doocy pressed Psaki on her attempt to blame Putin.

“Why did you guys decide to rebrand the rising gas prices as the #PutinPriceHikes?” Doocy asked. “We have heard the president warn for months that gas prices were rising because of supply chains and because of the post-pandemic demand.”

“As you know,” Psaki replied, “events in the world including the invasion by Russia of a foreign country does prompt instability and volatility in the global oil markets.”

Russian President Vladimir Putin
Russian President Vladimir Putin was to blame for the rising gas prices at today’s White House press briefing.

According to the price-tracking website Gas Buddy, the average price of US gasoline was $4.30 per gallon on Wednesday, up sharply from about $3.60 on the last day of February. Gas prices were slightly higher in February, starting at about $3.45 before nudging higher, than they were in January, when they hovered around $3.30. Gas prices can indirectly impact other costs.

Biden on Tuesday said that he “can’t do much” about gas prices that are surging past all-time highs after he signed an executive order to ban Russian oil imports.

“Can’t do much right now. Russia is responsible,” the president said as Republicans urged him to do more to expand domestic oil drilling and to allow for oil pipeline projects that they argue could have a long-term effect on prices.

High inflation has helped stifle Biden’s domestic political agenda as critics say the government spent too much without revenue offsets, in effect printing more money and making existing cash less valuable.

A sign shows gasoline fuel prices above six and seven dollars a gallon at the Shell gas station at Fairfax and Olympic Blvd in Los Angeles.
Gas prices have risen above six or seven dollars in some areas of the US, including Los Angeles.

Biden knocked NBC journalist Lester Holt as a “wise guy” last month when the veteran TV anchor pointed out that Biden erroneously said high inflation would be temporary and that instead it surged to the highest rate since 1982.

“I think it was back in July, you said inflation was going to be temporary. I think a lot of Americans are wondering what your definition of temporary is,” Holt said during Biden’s first TV interview of 2022.

Get the latest updates in the Russia-Ukraine conflict with The Post’s live coverage.

“Well, you’re being a wise guy with me a little bit,” Biden said. “And I understand, that’s your job.”

Biden in December claimed that the prior month’s 6.8 percent annual inflation rate was likely the “peak.” He said in July that inflation was “temporary” when it was around 5 percent.

Biden told Holt that COVID-19 supply chain bottlenecks helped drive inflation and singled out a shortage of semiconductors for cars — though the federal CPI tracked large jumps in a broad basket of goods and services.

“When can Americans expect some relief from this soaring inflation?” Holt asked.

The president said, “According to Nobel laureates, 14 on them that contacted me and a number of corporate leaders, it ought to be able to start to taper off as we go through this year.”

Person holding gas nozzle
Psaki noted that gas prices have risen 75 cents since the start of 2022.
Kena Betancur/VIEWpress/Getty Images

Biden has urged Democrats to pass his stalled $2.2 trillion Build Back Better Act to alleviate inflation. Sen. Joe Manchin (D-WVa.) effectively killed the bill in December, citing inflation and rejecting Biden’s argument that new subsidies for childcare, healthcare and electric vehicles would lower the cost of living.

“I cannot take that risk with a staggering debt of more than $29 trillion and inflation taxes that are real and harmful to every hard-working American at the gasoline pumps, grocery stores and utility bills with no end in sight,” Manchin said — meaning the bill could not pass the 50-50 Senate even under special budget rules that allow for a bare majority.

Critics blame Biden’s policies, including the $1.9 trillion American Rescue Plan Act, signed in March, which bailed out state and local governments, gave $1,400 stimulus checks to Americans who earned up to $75,000 per year, extended a $300 weekly unemployment supplement through Sept. 6 and expanded the annual child tax credit to $3,000-$3,600 per child, up from $2,000.

Biden on at least one occasion acknowledged the possible impact of generous social spending.

“The irony is people have more money now because of the first major piece of legislation I passed. You all got checks for $1,400. You got checks for a whole range of things,” Biden said in a November speech. “It changes people’s lives. But what happens if there’s nothing to buy and you got more money to compete for getting [goods]? It creates a real problem.”

Biden’s stimulus followed bipartisan legislation in 2020 that distributed about $4 trillion to businesses, individuals and state and local governments during the pandemic. Biden signed in November a $1.2 trillion bipartisan infrastructure bill that the CBO said would add $256 billion to the federal deficit, though Biden argued it would ultimately lower inflation by improving the transportation of goods.

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