White House expects big CPI price hikes in March

White House Press Secretary Jen Psaki answers questions during the daily briefing March 09, 2022 in Washington, DC. PSAKI answered a series of questions mainly related to Russia’s invasion of Ukraine.

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WASHINGTON — The Biden administration is bracing for Tuesday’s key consumer inflation report to show prices Americans paid soared in March as Russia’s assault on Ukraine drove up energy prices.

White House press secretary Jen Psaki said Monday that the Labor Department’s previous report – which showed prices rising at a dramatic pace in February – did not include the majority of rising labor costs. oil and gas caused by the unprovoked invasion of the Kremlin.

“We expect headline CPI inflation in March to be extraordinarily high due to Putin’s price hike,” Psaki told reporters.

“We expect a big difference between core inflation and headline inflation,” she continued, “reflecting global disruptions in energy and food markets.”

The Bureau of Labor Statistics will release its March update of the consumer price index, or CPI, on Tuesday. The CPI is the department’s tool for measuring inflation in a basket of goods and services the average American would buy – ranging from eggs and milk to cell phones and unleaded gasoline.

Economists consider two versions of CPI data: the headline figure that includes all the prices consumers face, and a so-called core CPI that excludes the often volatile swings in food and energy prices.

The White House says it anticipates a wider-than-normal disparity between headline and core readings due to an abnormal rise in gas prices that occurred last month. The price of a gallon of regular unleaded gasoline hit a record high of $4.33 on March 11, according to the American Automobile Association.

That price has since slipped to $4.11 a gallon, according to AAA.

“At times, gas prices were more than a dollar higher than pre-invasion levels, so an increase of about 25% in gas prices will drive tomorrow’s inflation reading,” said PSAKI.

Data from the Labor Department showed for several months that year-over-year price increases reached levels not seen since Ronald Reagan was in the Oval Office. The February reading showed that the core consumer inflation index rose 7.9% over the past 12 months, the highest level since January 1982.

The March report is is due out Tuesday at 8:30 a.m. ET.

The press secretary noted that President Joe Biden has taken several steps to help lower energy costs, including a decision to release about 1 million barrels of oil per day from the country’s Strategic Petroleum Reserve.

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On the last day of March, Biden blamed Russian President Vladimir Putin for the latest spike in energy costs.

“A lot of people don’t buy Russian oil anymore around the world. I banned imported oil from Russia here in America, Republicans and Democrats in Congress asked for it and support it. It was the right thing to do,” Biden said on March 31.

“But as I said at the time, it will come at a cost,” the president added. “As Russian oil exits the world market, oil supply is falling and prices are rising. Now Putin’s price hike is hitting Americans at the pumps.”

Stalled legislation — key parts of the president’s Build Back Better agenda — backed by the White House and congressional Democrats could also help lower child care and health care costs, Psaki added.