In a week that saw his supporters badly split over Supreme Court nominee Harriet Miers, his top aide Karl Rove back before a grand jury, further hurricane-relief scandals and his video op with troops in Iraq dismissed as scripted and artificial, President Bush really didn’t need this.
The week culminated with the Labor Department announcement that the Consumer Price Index, the most popular measure of inflation, had gone up 1.2 percent in September, the largest one-month increase in more than 25 years.
It broke a long spell when, in contrast to the ’70s and early ’80s, inflation was not on the economic radar screen.
Hurricane-driven energy prices are the reason that for the third quarter the CPI rose 9.4 percent. The hope is _ certainly the White House hopes _ that this is a spike, not a way of life, and that prices will subside as Gulf Coast energy production returns to normal, because that 1.2 percent increase would be almost 16 percent on an annual basis, an inflation rate of Carteresque magnitude.
The White House said it had confidence in the Fed’s ability to deal with the problem and that the core rate of inflation _ the CPI minus food and energy prices _ was only 0.1 percent, as it has been for the five previous months.
An excellent point economics-wise, but consumers feel food, gasoline and heating prices the hardest, and the Fed’s tools for dealing with inflation, if the September figure turns out not to be an aberration, are to raise interest rates and slow the economy. With all their other problems, this is not something the Republicans want to have hanging over their heads in the run-up to the elections next fall.
As press secretary Scott McClellan was detailing the White House reaction, outside on the South Lawn the president was lifting off in Marine One for a weekend of R&R at Camp David. He really needs that.
(Contact Dale McFeatters at McFeattersD(at)SHNS.com)