With supporters and critics of the Biden administration busy spinning the disastrous new inflation report, here are a few simple charts that explain what’s actually happening.
Rising inflation could hugely affect the fortunes of everyday Americans and Democratic politicians in 2022.
- The White House was quick to blame Russian President Vladimir Putin, while Republicans faulted President Biden.
- Here’s what the data shows, in four graphs.
INFLATION: Economists say spiking inflation is being propelled by rising gas prices, and will only get worse as the cost of crude oil increases.
Just In: US inflation was +7.9% (y/y) In February – another new 40-year high. (January inflation was +7.5%)
Gas, food and rent drove the increase. The rise in gas prices accounted for almost a third of the February increase.
Inflation is only expected to get worse as gas rises pic.twitter.com/nUGpOgEqPh
— Heather Long (@byHeatherLong) March 10, 2022
Biden addressed the grim economic news on Thursday, claiming Russia’s invasion of Ukraine was responsible for price hikes.
- “Today’s inflation report is a reminder that Americans’ budgets are being stretched by price increases and families are starting to feel the impacts of Putin’s price hike,” the president said in a statement.
- “A large contributor to inflation this month was an increase in gas and energy prices as markets reacted to Putin’s aggressive actions,”
THE PROBLEM PRE-DATES THE RUSSIA-UKRAINE WAR: Gas prices have been steadily rising since last year, and hit a record high (when not adjusted for inflation) of $4.318 per gallon on Thursday.
— Scott Walker (@ScottWalker) March 10, 2022
A CAVEAT: Some experts argue that rising prices can be explained by the COVID-19 pandemic’s effect on demand for gas.
— Patrick De Haan ⛽️📊 (@GasBuddyGuy) March 10, 2022
They say lower demand – prompted by business shutdowns, lockdowns and an increase in telecommuting – caused gas prices to drop, and the bump we’ve seen over the past year is a result of Americans getting back on the road amid the recovery.
ON THE OTHER HAND: Crude oil production still isn’t anywhere near pre-pandemic levels.
While it’s no easy feat to restart the throng of oil rigs frozen during the pandemic, critics say Biden and the Democrats’ less than friendly policies on fossil fuels aren’t helping.
- Energy consultant David Blackmon has called Biden’s shutdown of the Keystone XL pipeline a major “energy security blunder.”
- Last month, the administration paused new federal oil and gas leases and permits amid climate change concerns.
- In January, a Department of the Interior spokesperson praised a federal judge’s decision to cancel the sale of an oil and gas lease, which offered roughly 80 million acres in the Gulf of Mexico.