Biden hails inflation news after midterm victory lap: ‘My plan is working’

New report shows inflation falling for the fourth straight month

President Joe Biden on Thursday morning praised a new economic report that showed inflation falling for the fourth straight month.

“My economic plan is showing results, and the American people can see that we are facing global economic challenges from a position of strength,” Mr Biden said in a statement. “It will take time to get inflation back to normal levels — and we could see setbacks along the way — but we will keep at it and help families with the cost of living.”

The consumer price index was 7.7 per cent in October, a full point-and-a-half down from the 40-year-high of 9.2 per cent Americans experienced in June. Core inflation also dropped slighly from its September high of 6.6 per cent down to 6.3 per cent.

Wall Street’s reaction to the news was emphatic: US stocks posted their biggest one-day gain in years, with the Dow rising 1,200 points and the S&P 500 up 5.5 per cent.

Mr Biden noted that the news is particularly welcome as Americans head into the winter holiday season, with Thanksgiving and December’s major religious holidays fast approaching.

Inflation remains a major issue for Americans, the majority of whom live paycheck-to-paycheck and lack savings to cover an unexpected expense of $1,000. The price of gasoline and food increased again last month, but at slower rates than those prices were increasing at earlier points this year.

Exit polling from Tuesday’s midterm election showed that inflation remains top concern for voters, but, importantly, many of those voters blamed the high rate of inflation forces outside Mr Biden’s control.

High inflation is plaguing people in countries around the world, not just in the US, with Russia’s invasion of Ukraine taking its toll and some experts of the opinion that corporate price gouging is to blame. Indeed, a number of major corporations in different industries have reported sky-high profits this year as prices have increased.

In response, Mr Biden has floated enacting a corporate windfall tax on oil companies — though such a tax is unlikely to pass a Republican-controlled US House of Representatives.

Republicans, meanwhile, had been eyeing a reversal of portions of Mr Biden’s landmark Inflation Reduction Act. That is also unlikely to happen with Mr Biden enjoying veto power.

“I will oppose any effort to undo my agenda or to make inflation worse,” the president said on Thursday.

A significant majority of voters told the Associated Press survey VoteCast on Tuesday that they believe the US economy is not in good shape, but those voters didn’t automatically punish the sitting president. Instead, Democrats enjoyed a series of trend-defying successes on Tuesday and may be on track to retain control of the Senate and limit the Republicans to a razor-thin House majority.

Further down the ballot, Democrats seized unified control of four state governments as voters across the country defended abortion rights and turned back candidates who denied the results of the 2020 presidential election.