Biden vows to tackle inflation
Govt pins hopes on infrastructure spending package
Published: Nov 11, 2021 04:58 PM
US President Joe Biden Photo: IC

US President Joe Biden Photo: IC

US President Joe Biden acknowledged Wednesday that US shoppers were paying too much for everyday goods, vowing to tackle inflation "head on" after government data showed it had reached a 30-year peak in October.

The sharp spike in the consumer price index (CPI) reported by the Labor Department surprised economists and the White House alike, and came as Biden headed to Baltimore to promote the $1.2 trillion infrastructure overhaul he argues can turn the tide.

"Today's economic reports [show] unemployment continuing to fall but consumer prices remaining too high," Biden said in a televised address from the port of Baltimore.

The president was in the east coast city to make the case that his infrastructure package, passed by Congress last week, would bring down costs and reduce supply bottlenecks.

"Looking out there, everything from a gallon of gas to a loaf of bread costs more," Biden added. 

"Even though wages are going up, we still face challenges and we have to tackle them. We have to tackle them head on."

The White House said Biden would sign the infrastructure package into law Monday alongside lawmakers from both parties who helped write it and others who smoothed its path to the president's desk.

US inflation had remained muted in recent years, but roared back with a vengeance in 2021 as American businesses began resuming normal operations with the help of COVID-19 vaccines.

Prices were pressured by high demand from consumers flush with cash, combined with shortages of US workers and snarls in supply chains worldwide that slowed deliveries of crucial components such as semiconductors.

While Biden has argued that the increases will prove temporary, they have given his opponents a potent counterargument to the spending plans he has staked his presidency on as his approval ratings sag.

"Spending trillions of more dollars on the Democrats' tax and spending spree will only make the crisis Americans are facing worse," Republicans on the House Energy and Commerce Committee tweeted, dubbing the trend "Bidenflation."

The president scored a victory when Congress passed the infrastructure overhaul last week, but his Build Back Better plan to strengthen America's social safety net with a $1.85 trillion investment over 10 years remains mired in infighting among his Democrats who narrowly control the legislature.

Senator Joe Manchin, a Democrat who has objected to the plan's cost, said on Twitter following the CPI report: "By all accounts, the threat posed by record inflation to the American people is not 'transitory' and is instead getting worse."

The 6.2 percent climb in CPI compared to October 2020 was the sharpest annual increase since November 1990, and Mickey Levy of Berenberg Capital Markets said "price pressures have broadened."