President Joe Biden claimed Friday that inflation has fallen for 10 straight months, just days after the Bureau of Economic Analysis announced that the Federal Reserve’s preferred inflation gauge rose in April.
Biden’s comments came during a prime-time Oval Office address to the nation, in which he stressed the need for bipartisanship despite Democrats’ and Republicans’ drastically different views for the nation and economy.
“More Americans are working today than ever in the history of this country. And inflation has dropped 10 straight months in a row,” the president claimed.
Most experts predicted that the annual personal consumption expenditures price index would fall below the 4.2% posted in March, but the Biden administration reported on May 26 that the index rose two-tenths of a point to 4.4%.
Core PCE, which factors out volatile food and energy prices, also rose to a 4.7% annual rate.
Though PCE rose in April, the consumer price index, also published by the administration, fell to a two-year low in April. The producer price index also registered a two-year low of 2.3% in March.
Despite Biden’s recently brokered debt ceiling agreement, Fitch announced Friday that the United States’s AAA rating would stay on a negative watch as the group monitors “the full implications of the most recent brinkmanship episode and the outlook for medium-term fiscal and debt trajectories.”
Fitch said in May before the debt ceiling agreement was reached that a national default “would be a negative signal of the broader governance and willingness of the U.S. to honor its obligations in a timely fashion,” resulting in a downgrade in the country’s credit.
The Fed signaled after its latest meeting that, due to declining inflation, the board could finally cease raising interest rates as a means of combating rising prices.
“We will be sticking with the forecast for the Fed to keep rates unchanged through the remainder of this year,” Ryan Sweet, chief U.S. economist at Oxford Economics, previously told the Washington Examiner. “However, odds are rising that we will be altering the forecast for the fed funds rate in 2024, reducing the number of rate cuts.”
The White House did not answer questions about Biden’s inflation claims Friday evening.