Prices will ‘take time’ to go down

WASHINGTON — President Biden celebrated a slight decline in the rate of annual inflation to 7.1% Tuesday — while warning a return to normal rates of around 2% was “going to take time” and that there may be “setbacks along the way.”

Biden spoke after new data showed annual price increases cooled in November, continuing a gradual deceleration from a peak of 9.1% in June, while still remaining much higher than at any point since the early 1980s.

“In a world where inflation is rising at double digits in many major economies around the world, inflation is coming down in America,” Biden said at the White House, referring primarily to European inflation, which slightly outpaces US rates due to energy disruption from Russia’s invasion of Ukraine.

“Make no mistake, prices are still too high and we have a lot more work to do,” the president said. “But things are getting better and headed in the right direction.”

“Most Americans can see the progress driving down the street and finding relief at the pump as gas prices fall,” he went on. “Today’s report contains another piece of good news: food inflation slowed last month, providing much-needed relief for millions of families at the grocery store.”

Over the past 12 months, US food prices increased 10.6% — with grocery prices going up 12% — while energy prices jumped 13.1%, according to Bureau of Labor Statistics data.

So-called “core inflation,” referring to all items except food and energy, increased by 6% over November of 2021.

In response to a reporter’s shouted question about when prices would “get back to normal,” Biden suggested it might happen toward the end of 2023.

“I hope by the end of next year we’re much closer,” he said. “But I can’t make that prediction. I just — I’m convinced they’re not going to go up. I’m convinced they’re going to continue to go down.”

The Federal Reserve’s target for annual inflation is 2% and for the past two decades, it has been roughly that. The central bank has dramatically increased interest rates in an attempt to lower inflation, heightening concern about a possible recession next year.

The White House has largely blamed inflation on COVID-19, alleged corporate price-gouging, and Russia’s invasion of Ukraine — while Biden’s critics point to massive increases in government spending since he took office in January 2021.

“I want to be clear: it’s going to take time to get inflation back to normal levels as we make the transition to a more stable and steady growth,” Biden said. “But we could see setbacks along the way as well. We shouldn’t take anything for granted. But what is clear is that my economic plan is working and we’re just getting started.”

He added: “I know it’s been a rough few years for hardworking Americans and for small businesses as well, and that for a lot of folks things are still pretty rough. But there are bright spots all across America where we’re beginning to see the impact of our economic strategy and we’re just getting started.”

Biden has signed some of the largest spending bills in US history, arguing that they were needed to keep the economy afloat and ultimately could reduce some consumer costs, including by improving transportation and energy efficiency.

Last year, Biden signed a $1.9 trillion stimulus bill that passed without Republican support and a $1.2 trillion bipartisan infrastructure law. This year, he signed the $280 billion bipartisan CHIPS and Science Act, a $437 billion environmental and healthcare spending bill, and a $270 billion veterans healthcare bill.

Although some of the spending bills contained new revenue to offset spending, skeptics accused bill authors of budget gimmicks to paint a rosier economic picture by spreading spending out over fewer years than those offsets.

Republicans will retake the House next month and are vowing to halt ambitious Biden proposals. Rep. Elise Stefanik (R-NY), chairwoman of the House Republican Conference, told The Post in a recent interview that the GOP would seek to “claw back this reckless spending” to reduce inflation.

“The first way we start to strengthen the economy is to rein in inflation by stopping the reckless spending bills,” Stefanik said. “We absolutely will use that power … to not only claw back this reckless spending but also put a stop to Joe Biden’s spending proposals … and that will begin to lower the rate of inflation.”