On Wednesday, the Federal Reserve raised interest rates by three-quarters of a point. This move, meant to counter inflation, is the largest increase since the mid-1990s.
In May, inflation increased at the quickest pace since December 1981, rising 8.6% over the past year. On Tuesday, the Commerce Department reported that retail and food service spending posted a 0.3% decline in May. Retail sales turned negative in May as consumers pulled back spending while inflation surged. This was well below the market expectation of a 0.1% gain. Sales were below the pace set in April, which posted a downwardly revised 0.7% increase from the initial 0.9% estimate. Sales at gas stations increased 4% due to fuel prices. Regular unleaded gas hit $4.43 a gallon in May and is now running around $5. That growth was offset by a 3.5% decline at motor vehicle and parts dealers. Miscellaneous store retailers saw a 1.1% drop in sales. Online stores posted a 1% decline.
Republicans are blaming the Biden administration and the Democratic-controlled Congress for the economic pressures impacting American families.
Congressman Barry Moore’s (R-AL02) office reported that “American families are on the brink of financial crisis as they pay more for every good and service in their daily lives. This runaway inflation is directly traced to Democrats’ reckless socialist spending that paid workers to stay home and spurred manufacturing and supply chain bottlenecks.
“Instead of rolling out more red tape and policing banks to ensure they use non-offensive gender pronouns, we should be reducing government spending and regulations to unleash the American economy," Moore said. "Washington Democrats are dead set on forcing Americans to go woke and don’t care if they go broke as a consequence.”
The average price for a gallon of fuel passed $5 a gallon over the weekend.
U.S. Sen. Tommy Tuberville (R-Alabama) said on social media, “Today's national average for a gallon of ⛽️ is
⬆️ 15 cents more than a week ago
⬆️ 58 cents more than a month ago
The numbers speak for themselves. It's past time for President Biden to #UnleashAmericanEnergy.”
Congressman Jerry Carl (R-AL01) said, “Fuel prices have been on the rise for over a year thanks to President Biden's war on American energy production. Every single time I put gas in my truck, it costs significantly more than it did the last time. These fuel price increases are directly tied to the inflation we are seeing across the board, and it is putting a horrible strain on everyone in this country. I have introduced multiple energy bills since I've been in Congress, and I'm most proud of my Unleashing American Energy Act. This bill would end the Biden administration's cancellations of our offshore oil and gas lease sales, and it would increase domestic production. This won't solve all our issues immediately, but it will go a long way to start lowering fuel prices.”
The Republican Party is hopeful that the growing dissatisfaction with Democrats’ economic policies will lead to Republicans taking back control of both Houses of Congress in midterm elections this fall and a Republican presidential election victory in 2024.
For his part, President Biden met with Speaker of the House Nancy Pelosi (D-California) and Senate Majority Leader Chuck Schumer (D-New York) Wednesday on the economy.
The White House wrote in a release, “This afternoon, President Biden hosted Speaker Pelosi and Leader Schumer to talk about their shared agenda of tackling inflation and lowering prices and transitioning from a historic economic recovery to stable, steady growth. Thanks to their shared leadership, we’ve seen unprecedented job and small business creation. They discussed their plans for fighting the global problem of inflation that is affecting every major economy, such as bringing down prescription drug and energy costs, and adding to the historic deficit reduction we have accomplished.”
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