Stubbornly high inflation rates dragged on the U.S. economy in 2022, but recent data reveal signs of improvement.
During the course of the 2022 U.S. midterm election season, the highest inflation rates in forty years dogged Democrats in their efforts to maintain control of the Senate and to stem losses in the House of Representatives.
The global economy suffered from high energy prices fueled by oil supply concerns resulting from the Russian invasion of Ukraine early in the year.
Ultimately, other political considerations such as the the Dobbs v. Jackson Supreme Court decision that overturned Roe v. Wade gave Democratic voters, it is widely believed, the boost in passion they needed. That resulted in continuing control of the Senate and minimal losses in the House, which did, however, fall to Republican control.
One Inflation Indicator Suggests Positive News
According to the Bureau of Labor Statistics, the Producer Price Index for final demand declined 0.5% in December. Final demand prices advanced 0.4%.
On an unadjusted basis, it added, the index for final demand increased 6.2 percent in 2022 after rising 10.0 percent in 2021.
The decrease in the final demand index can be attributed to a 1.6-percent decline in prices for final demand goods, the bureau said. The index for final demand services rose 0.1 percent.
President Biden Calls the Development “Real Progress”
President Joe Biden issued a statement from the White House Jan. 18, saying the data reflected progress on the problem of high inflation.
“Today, we received more evidence that we are making real progress tackling inflation and lowering costs, successfully transitioning from a historic recovery to steady and stable growth,” said Biden in the statement. “The inflation rate for producers fell further, and is now at its lowest level since March 2021.”
“This decrease reflected a decline in food and energy prices, bringing real breathing room to working families,” he continued. “And, price increases outside of food, energy, and trade services slowed and are at their lowest level since March 2021.”
