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State of the U.S. economy one year into the Biden administration

The economy is a top concern for many as they deal with inflation
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Posted at 2:34 PM, Jan 21, 2022
and last updated 2022-01-21 15:04:41-05

The economy and rising costs due to inflation are the issues Americans say they are most concerned about in the new year.

As recent as last month, President Joe Biden said that while inflation is high now, it is only temporary.

However, the numbers are still high and causing concern on Wall Street and Main Street.

The Consumer Price Index, a tool used to gauge inflation, was up 6.8% year-over-year in December.

That's the highest rate since 1982.

Price indexes tracking food and energy both hit 13-year highs.

According to the most recent reports, gas prices and food prices are up 58% and 6%, respectively.

As prices go up, Americans' attention on the issue also rises.

A new CBS-YouGov poll shows 65% of people think the Biden administration hasn't focused enough on inflation.

Over the summer, administration officials and top CEOs called signs of rising costs "transitory" or temporary.

"I'm not saying that this is a one-month phenomenon," Treasury Secretary Janet Yellen said.

"But I think over the medium term, we'll see inflation decline back to a normal level."

In a recent change of tone, Yellen admitted that inflation should no longer be characterized as "temporary," and Federal Reserve Chairman Jerome Powell says he may have to take action to set things straight.

"If we have to raise interest rates more over time, we will," Powell said.

"We will use our tools to get inflation back."

It's a move the president said Wednesday he supports.

Economists say Omicron concerns, supply chain bottlenecks, and strong consumer demand are the main factors behind the rising costs.

The president has insisted a solution could be to pass his Build Back Better spending plan — a stalled agenda item that he believes still has hope.

"I'm not going to negotiate against myself as to what should be in it," President Biden said.

"But I think we can break the package up, get as much as we can now, come back and fight for the rest later."

The White House said there has been plenty of good economic news over the past year, including the unemployment rate falling to 3.9% last month. But just last week, weekly jobless claims spiked up 230,000.

With Americans uncertain about the economic recovery moving forward, one thing is certain — it's a top priority for voters ahead of the midterm elections this November.

This story was first reported by Willie James Inman at Newsy.