U.S. stock markets tanked on Tuesday after a Labor Department report showed persistent inflation continues to surge and dent families’ budgets, while President Biden hosted thousands at the White House to celebrate the passage of his massive tax, healthcare and climate spending bill.
Despite the grim economic news, the party atmosphere reigned at the White House, where Mr. Biden hosted thousands of supporters and was serenaded on the South Lawn by music legend James Taylor.
Mr. Biden didn’t address the tumbling stocks or stubbornly high inflation in his nearly 30-minute remarks, in which he largely shamed Republicans for not supporting his so-called Inflation Reduction Act.
Stocks fell sharply Tuesday afternoon after the dismal Labor Department report said inflation was higher than expected in August, damaging investor optimism that prices would cool.
The Dow Jones Industrial Average tumbled by roughly 1,300 points, the S&P 500 dropped by 4.3% and NASDAQ sank 5.1% by the end of the day. It was Wall Street’s worst day in months.
The Consumer Price Index rose 0.1% in August over July, according to the Bureau of Labor Statistics. The annual inflation rate of 8.3% was down slightly from 8.5% in July and 9.1% in June, when it reached a 41-year high.
SEE ALSO: Inflation rises in August, rate remains near historic high ahead of key Fed meeting
Core CPI, which excludes food and energy costs, increased 6.3% in August from a year earlier. That was up sharply from the 5.9% rate in both July and June.
The price of groceries rose 13.5% in August from last year, which is the highest it’s been since 1979, the report said.
Many economists had predicted inflation would fall in August.
But the dismal economic news did little to dampen the festive atmosphere at the White House. Mr. Biden hailed his $740 billion spending bill as a victory for the American people over persistent inflation. He called it the “single most important law passed in the Congress to combat inflation.”
“We’re going to lower prescription drug costs, lower health insurance costs, lower energy costs and we’re going to take the most aggressive action ever, ever, ever to confront the climate crisis,” Mr. Biden said from the White House South Lawn.
Republicans said the bleak economic news was nothing to celebrate.
SEE ALSO: ‘That’s an applause line’: Pelosi shames White House crowd into clapping for Biden
“Biden and Democrats throwing themselves a party for raising taxes on families during a recession proves just how out-of-touch they are. After ramming through the Bidenflation Scam bill under the guise of reducing inflation, it is clear Democrats don’t care about lying to the American people, they only care about power,” said Republican National Committee Chairwoman Ronna McDaniel.
Still, the party continued at the White House.
Mr. Taylor kicked off the event, performing an acoustic version of his hit, “Fire and Rain,” before he was joined by his wife, Kim, for renditions of “Shower the People,” and “America the Beautiful.”
Republicans on the House Select Committee on the Economy tweeted, “Biden brought James Taylor to the White House party to celebrate inflation because Taylor actually remembers when inflation was this high.” The post included photos of Mr. Taylor in 1982 and today.
The music artist was among scores of Biden supporters, union officials and Democrats who attended the event. House Speaker Nancy Pelosi, California Democratic, and Senate Majority Leader Charles E. Schumer of New York also attended, and spoke before the president.
The law, which Mr. Biden insists will reduce consumer prices, passed the Senate by just one vote last month with Vice President Kamala Harris casting the tie-breaking vote. The House had passed the bill the day before by a 220-207 margin along party lines.
Although Democrats have touted the law as a way to combat rising consumer prices, independent studies have been skeptical.
A University of Pennsylvania Penn Wharton study found that the measure would have “zero” impact on inflation, while the nonpartisan Congressional Budget Office concluded it would have a “negligible” effect on prices.
— Dave Boyer contributed to this report.