The economy took center stage again Wednesday in Connecticut’s gubernatorial contest with the release from the U.S. Bureau of Labor Statistics of the Consumer Price Index for June that showed inflation rose to 9.1%.
That’s the largest annual increase since the period ending November 1981. It blew past analysts expectations, but Democratic Gov. Ned Lamont pointed out that it’s “a backwards looking number.”
“What you’ve seen in the last three or four weeks in terms of declining gas prices, declining diesel prices, what you’ve seen in terms of construction materials, in terms of food and grain and all those things on the commodities markets, I think we’re beginning to bend the curve,” Lamont said Wednesday.
However, his Republican opponent Bob Stefanowski had a different take.
“Today Connecticut families and small businesses face inflation at another record high, prices on everything are going up again, and our state crashed fifteen spots in the CNBC ranking for business friendliness with high cost of living, and high cost of doing business as the top reasons,” Stefanowski said in a press release.
He added: “Governor Lamont knows that his tax hikes now and over the years are making it harder for families, and small businesses to weather these tough times, but he hasn’t rolled back one of his tax hikes, not even his tax on food.”
The CPI showed that the energy index rose 7.5% over the month and contributed nearly half of the all-items increase, with the gasoline index rising 11.2% and the other major component indexes also rising. The food index rose 1% in June, as did the food-at-home index.
The index for all items minus food and energy, which are considered highly volatile, rose 0.7% in June after increasing 0.6% percent in the preceding two months.
While almost all major component indexes increased over the month, the largest contributors were the indexes for housing, used cars and trucks, medical care, motor vehicle insurance, and new vehicles. The indexes for motor vehicle repair, apparel, household furnishings and operations, and recreation also increased in June.
But Democrats in Connecticut continue to argue that inflation is a global issue and politicians at the state level can do little to control it. Republicans on the other hand would love to make voters think they do have some control over it.
The Biden administration spent Tuesday downplaying expectations for the report.
“June CPI data is already out of date,” White House Press Secretary Karine Jean-Pierre said during Monday’s press briefing.
On Wednesday Biden called inflation “unacceptably high” but pointed out they were already out-of-date, especially when it comes to gas prices.
“Today’s data does not reflect the full impact of nearly 30 days of decreases in gas prices that have reduced the price at the pump by about 40 cents since mid-June,” Biden said in a statement.
Nonetheless, the CPI report is likely to embolden the Fed, which will convene a two-day meeting later this month and is expected to boost the benchmark Federal Funds Rate by another 75 basis points. The Federal Reserve Open Market Committee raised the rate by that much last month, the largest single increase since November 1994.