Washington, Oct 29 (AFP/APP):President Joe Biden has bet that the high US inflation rate will decline and help the case for the spending plans he’s staked his presidency on, but data released Friday instead showed prices remaining stubbornly high in the world’s largest economy.
There were also signs of an acceleration in wages that could further fuel inflation, as well as a spike in consumer expectations of price increases to come.
The Commerce Department reported inflation climbed 4.4 percent last month compared to September 2020, its biggest jump since January 1991 and the latest complications for the president’s proposal to spend $1.75 trillion on an array of social services.
That bill, dubbed Build Back Better, has faced a tortuous path through Congress, where some moderate Democrats have worried it could make the price situation worse.
“I don’t think that these investments will drive up inflation,” Treasury Secretary Janet Yellen said in an interview with CNBC from Rome, where G20 leaders including Biden are gathering.
She said the cost of both the social spending plan as well as a $1.2 trillion measure to revamp the nation’s infrastructure would be offset by higher levies on the wealthy and corporations as well as better tax enforcement, while helping families by lowering health and child care costs.
“The infrastructure and Build Back Better packages are spending that’s really small relative to the economy in any year and spread over 10 years. And, as I said, it will boost the economy’s potential to grow,” Yellen said.
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