The Bureau of Labor Statistics announced on Friday that the producer price index, which is used to monitor inflation, increased to 2.7% for the year that ended in June.
This is bad news for President Joe Biden because rise in inflation in June may cost Biden in the upcoming election.
From 2.2% in May, economists had predicted a modest increase in inflation.
Monthly changes in the producer price index were 0.2% higher or lower than anticipated.
An update to the consumer price index on Thursday indicated that inflation had eased to 3%, ahead of the producer price index data. Not as well-known as the CPI is the producer price index (PPI), which tracks the prices that suppliers and companies pay for their goods and services. However, analysts keep an eye out for any new indications of pricing changes that can affect households.
Although there has been some success in reducing inflation down from its top of almost 9% in 2022, the Fed still has a ways to go before achieving its goal of 2% inflation.
2.7% rise in inflation in June may cost Biden in the upcoming election
The next election has been significantly influenced by inflation, which has lowered voter opinions of the economy and, consequently, Biden’s scores for economic acceptance. The White House has made a concerted effort to demonstrate how inflation has generally decreased since reaching its peak in June 2022.
Captain America 4 teaser: Thaddeus Ross and Sam Wilson team up for Brave New World
Republicans and former President Donald Trump have capitalized on the significant drop in Biden’s overall approval ratings caused by voter dissatisfaction with his handling of the economy in the run-up to the election.
According to a RealClearPolitics analysis of polls on economic approval, just 39.7% of respondents support Biden’s economic leadership, while more than 58% disagree with his approach.
Notwithstanding the challenges posed by inflation and the Fed’s decision to raise interest rates to their highest point since the early 2000s dot-com bubble, the labor market has managed to hold steady and the unemployment rate is low.
In June, the economy created 206,000 new jobs, while the unemployment rate increased by 0.1 percentage points to 4.1%, according to a recent report from the Bureau of Labor Statistics. Despite a little upward trend in recent months, the unemployment rate of 4.1% remains historically low.