by Casey Harper
Federal data released Friday showed that inflation remains elevated. The figures came out on the heels of other data showing the U.S. Gross Domestic Product underperformed in the first quarter of this year.
Both the inflation and GDP data points raised concerns among economists and renewed criticism of President Joe Biden among Republicans.
“Given the elevated levels of inflation – and this is the new normal for 2024 – the market is going to need to get over hopes for Fed rate cuts,” Chris Zaccarelli, chief investment officer for Independent Advisor Alliance in North Carolina, said in a statement. “Yes, they may cut once (or not at all), but there is no possibility the Fed is going to cut rates 3 or more times, unless we go into recession.”
The U.S. Bureau of Economic Analysis released the Personal Consumption Expenditure data Friday, which showed the PCE rose 0.3 percent last month. The federal Consumer Price Index, another leading marker of inflation, reported prices rising 0.4 percent last month.
“A lot of people have argued elevated inflation is just because of housing and housing is lagged/inappropriate,” Jason Furman, a Harvard economist and former economic advisor during the Obama administration, wrote on X, formerly known as Twitter, on Friday.
“But even excluding housing, recent inflation is highly elevated…” he continued
That inflation data comes after new federal data this week showed that the GDP increased at an annual rate of only 1.6 percent in the first three months of this year, much less than the 3.4 percent growth in the previous quarter and well below experts’ expectations.
“New GDP numbers out – yet ANOTHER depressing quarter under Biden…” Richard Stern, an expert at the Heritage Foundation, wrote on X. “This marks the THIRD quarter in a row of the government growing faster than the economy!
“That’s socialism at work as the woke left-wing government eats everyone else’s lunch off the buffet table – all while the personal saving rate falls off a cliff and is less than half what it was pre-pandemic,” he added.
Republicans heaped on more criticism of Biden after the new economic data.
“Antisemitism is running rampant on campuses,” U.S> Rep. Elise Stefanik, R-N.Y., wrote on X. “Illegal immigrants are invading both borders. Inflation is rising and draining the pocketbooks. America is experiencing one crisis after another under Joe Biden’s failed leadership.”
Prices have risen nearly 20 percent since Biden took office.
“President Biden’s recipe of outlandish spending and higher taxes is robbing the American people and hurting the economy,” House Ways and Means Committee Chairman Jason Smith, R-Mo., said in a statement. “The soaring cost of gas and groceries keeps killing family budgets – leaving Americans struggling to either pay rent or buy a house. The latest GDP report shows an economy sagging under the weight of failed economic policies. With prices continuing to rise and the Federal Reserve likely to keep interest rates at the highest levels in over 20 years, the American Dream is slipping out of reach for more families.”
Biden, though, has rebuffed criticism and pointed to his other economic wins, as The Center Square previously reported.
“Today’s report shows the American economy remains strong, with continued steady and stable growth,” Biden said in a statement last week. “The economy has grown more since I took office than at this point in any presidential term in the last 25 years – including 3 percent growth over the last year – while unemployment has stayed below 4 percent for more than two years.”
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Casey Harper is a reporter at the Washington D.C. bureau of The Center Square.
Photo “Grocery Store Prices” By Michael Burrows.
