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The Road Ahead Will Be Tough: Resolving Inflation to Normal Levels Poses Challenges for the Economy and President Biden


Sep 9, 2023

The US economy has made progress in reducing inflation, but economists warn that reaching the desired 2 percent level will be more challenging. While inflation decreased from 9.1 percent last summer to 3 percent in June, economists believe that going from 3 to 2 percent will be a tough task, especially with obstacles like temporary spikes in gas prices. This is particularly concerning for President Biden’s reelection campaign, as he has touted the decline in inflation as a success of his policies. However, a rise in gas prices this summer due to factors such as production cuts by Saudi Arabia and extreme heat has made it harder to sell this narrative. Gas prices heavily influence Americans’ perception of the economy, and consumer confidence has declined as prices at the pump rose. As a result, Biden’s standing in the polls has taken a hit, indicating that people believe his policies have worsened economic conditions.

Despite the challenges, Biden and his administration have launched a campaign to showcase the improving health of the economy. They have traveled the country to highlight the success of Bidenomics, emphasizing record job creation, outpacing wages, and decent economic growth. However, Federal Reserve Chair Jerome Powell has acknowledged that the process of bringing inflation down to a normal level will be bumpy, with August being a particularly challenging month due to higher gas prices. While the higher gas costs have led Republicans to criticize Biden, economists believe that the spike is temporary and that better days are ahead in terms of inflation data. However, Americans may still be dissatisfied with the current economic situation, as they are paying more for goods and services than they were a few years ago.

Economists believe that covering the last mile in the fight against inflation will be the most difficult. Although there have been setbacks, like the previous year’s rough economic conditions and higher oil prices due to geopolitical issues, they believe that the underlying problem has improved. Despite this, economists caution that wages will need time to catch up and for people to feel better about the direction of the economy. Overall, economists remain cautiously optimistic that the US will successfully navigate the challenges in reaching the desired 2 percent inflation level.

By Editor

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