President Biden on Tuesday hosted a White House celebration to mark the passage of the sweeping Inflation Reduction Act against an unhappy backdrop: a tumbling stock market that fell on the news that consumer prices rose in August.
Biden, in remarks to a crowd of more than 1,000 people, called the bill the “single most important legislation passed in the Congress to combat inflation, and one of the most significant laws in our nation’s history, in my view.” …
But the party-like atmosphere masked the reality that Biden must still manage a precarious economy that threatens his positive message heading into the midterms.
The consumer price index (CPI), a closely watched gauge of inflation, rose 0.1 percent in August after staying flat in July, according to data released Tuesday by the Labor Department.
Economists expected the steady decline in gas prices throughout last month to lead to a 0.1 percent decline in monthly inflation, but prices for food, electricity and other products kept rising.
The worse than expected inflation numbers sent the stock market tumbling. The Dow Jones dropped more than 1,200 points, while the S&P 500 had its worst day since June 2020.
Inflation has for months been a thorn in the side of Biden and Democrats, providing fodder for Republican attacks and sinking Biden’s approval ratings. But with the passage of the $740 Inflation Reduction Act with all Democratic votes and months of falling gas prices, Biden and his party have finally felt like they can run on good economic news.