The White House sought to tamp down concerns from the American public with Wednesday’s report that inflation jumped at its fastest pace in nearly 40 years last month, a 7 percent spike from a year earlier that is increasing household expenses, eating into wage gains and heaping pressure on President Joe Biden and the Federal Reserve to address what has become the biggest threat to the U.S. economy.

Psaki’s remarks in the player above.

White House National Economic Council Director Brian Deese said the White House and independent forecasters expected inflation to “moderate over the course of 2022.”

Prices rose sharply in 2021 for cars, gas, food and furniture as part of a rapid recovery from the pandemic recession. Vast infusions of government aid and ultra-low interest rates helped spur demand for goods, while vaccinations gave people confidence to dine out and travel.

As Americans ramped up spending, supply chains remained squeezed by shortages of workers and raw materials and this magnified price pressures.

Deese said the Biden administration’s focus on its Build Back Better agenda would directly positively impact the biggest costs families face.

White House press secretary Jen Psaki said inflation posed “a multipronged challenge,” that impacts the supply chain and prices across the country.

The Labor Department reported Wednesday that a measure of inflation that excludes volatile food and gas prices jumped 5.5 percent in December, also the highest in decades. Overall inflation rose 0.5 percent from November, down from 0.8 percent the previous month.

Price gains could slow further as snags in supply chains ease, but most economists say inflation won’t fall back to pre-pandemic levels anytime soon.

High inflation isn’t only a problem for the U.S. In the 19 European countries that use the Euro currency, inflation rose 5 percent in December compared with a year earlier, the biggest increase on record.

The United States hasn’t seen anything like it since the early 1980s. Back then, Fed Chair Paul Volcker responded by pushing interest rates to painful levels – the prime rate for banks’ best customers hit 20 percent in 1980 – and sent the economy into a deep recession. But Volcker succeeded in taming inflation that had been running at double-digit year-over-year levels for much of 1979-1981.

High inflation has put President Biden on the defensive. His administration, echoing officials at the Fed, initially suggested that price increases would be temporary. Now that inflation has persisted, Biden and some congressional Democrats have begun to blame large corporations. They say meat producers and other industries are taking advantage of pandemic-induced shortages to drive up prices and profits. But even some left-of-center economists disagree with that diagnosis.