WASHINGTON – The White House is more than doubling its annual inflation forecasts in new projections released Friday, as supply chain disruptions stemming from the Covid-19 pandemic continue to push up prices.
The Office of Management and Budgets said it expects consumer prices to rise by 4.8% in the fourth quarter over the previous year, up from the 2% rise forecast by the Biden administration in May. Officials see these price pressures declining rapidly next year, with a consumer price index rising 2.5% in the fourth quarter of 2022, more than the 2.1% expected in May and reaching 2.3% in 2023.
These updated projections are consistent with other independent forecasts, including those from the Federal Reserve, and reflect the administration’s view that price pressures, while higher than expected earlier this year, are likely to they will fade over time, administration officials said Friday.
“We believe this trajectory is very consistent with the inflation outlook we have been discussing almost since we got here,” an official said in a call to reporters.
Recent data suggest that inflationary pressures may have begun to decline, but that they remain high. Consumer prices rose 0.4% last month, below the previous month’s 0.5% gain, according to the Federal Reserve’s preferred inflation gauge. Compared to a year ago, global prices rose 4.2%.