While today's headline inflation reading is unacceptably high, it is also out-of-date. Energy alone comprised nearly half of the monthly increase in inflation. Today's data does not reflect the full impact of nearly 30 days of decreases in gas prices, that have reduced the price at the pump by about 40 cents since mid-June. Those savings are providing important breathing room for American families. And, other commodities like wheat have fallen sharply since this report.
Importantly, today's report shows that what economists call annual "core inflation" came down for the third month in a row, and is the first month since last year where the annual "core" inflation rate is below six percent.
Inflation is our most pressing economic challenge. It is hitting almost every country in the world. It is little comfort to Americans to know that inflation is also high in Europe, and higher in many countries there than in America. But it is a reminder that all major economies are battling this COVID-related challenge, made worse by Putin's unconscionable aggression.
Tackling inflation is my top priority – we need to make more progress, more quickly, in getting price increases under control. Here is what I will do:
First, I will continue to do everything I can to bring down the price of gas. I will continue my historic release of oil from our strategic petroleum reserve. I will continue working with our European allies to put a price cap on Russian oil - sapping Putin of oil revenue. And, I will continue to work with the U.S. oil and gas industry to increase production responsibly — already, the U.S. is producing 12.1 million barrels of oil per day and is on track to break records.
But I will also continue to insist - as I have with urgency recently - that reductions in the price of oil must produce lower gas prices for consumers at the pump. The price of oil is down about 20% since mid-June, but the price of gas has so far only fallen half as much. Oil and gas companies must not use this moment as an excuse for profiting by not passing along savings at the pump.
Second, I will urge Congress to act, this month, on legislation to reduce the cost of everyday expenses that are hitting American families, from prescription drugs to utility bills to health insurance premiums and to make more in America.
Third, I will continue to oppose any efforts by Republicans - as they have proposed during this campaign year — to make things worse by raising taxes on working people, or putting Social Security and Medicare on the chopping block every five years.
Finally, I will continue to give the Federal Reserve the room it needs to help it combat inflation.
