In her first briefing with reporters on Tuesday, White House press secretary stated that energy is a significant driver of inflation, aligning with previous statements made by President Donald Trump. However, the impact of energy prices on inflation is subject to various factors.
On a monthly basis, the 2.6% increase in energy prices contributed to 41% of the overall 0.4% rise in inflation as measured by the Consumer Price Index (CPI) in December. Yet, on an annual basis, energy prices were 0.5% lower by December, which slightly tempered the 2.9% annual inflation rate recorded for that month.
Following Russia's invasion of Ukraine, the surge in energy prices played a more substantial role in driving both monthly and annual inflation rates. In June 2022, when inflation peaked at 9.1%, energy prices had soared over 40% compared to the previous year, marking the largest annual increase since 1980.
Aside from energy prices, the press secretary also attributed inflation to what she described as excessive spending under the Biden administration. However, the extent to which government spending has contributed to the record inflation levels seen during this administration remains a topic of debate, with conflicting research findings on the matter.
