White House Cheers Inflation Data While Iran War Sparks New Price Surge
The news of an improvement in consumer prices in June came as the U.S. and Iran escalated attacks, risking a return to high energy prices.
When rising gas prices began to cut into Americans’ paychecks, President Trump’s top economic adviser sought to offer a note of reassurance — both for struggling families and for his increasingly nervous political party.
It was late April, about two months into the war with Iran, but Kevin Hassett, the director of the National Economic Council, argued that Americans were actually in strong financial shape. And as a result, he added, the gains in the economy seemed poised to boost Republicans’ political prospects in time for the November midterms.
“People look at their wallets, and they vote,” Mr. Hassett told reporters that day, citing “massive economic literature that says that that’s how you predict elections.”
The first summer report card, which arrived on Tuesday, offered an early bit of positive news for the White House: Consumer prices fell 0.4 percent in June. It was a notable improvement from the three-year high registered in May, even though prices overall were up 3.5 percent compared to the same time last year, a rate still well above policymakers’ 2 percent target.
But the report arrived precisely as the United States and Iran returned to open conflict, threatening to reignite the very sort of economic chaos that had caused inflation to soar to a three-year high in the first place. By Tuesday morning, oil and gas prices seemed poised to climb, raising the odds that a recent reprieve at the pump could prove short lived, squeezing families and businesses once again in the coming months.
