Originally Published: 13 OCT 22 12:41 ET

Updated: 13 OCT 22 14:24 ET

By MJ Lee, Phil Mattingly and Maegan Vazquez, CNN

(CNN) -- The White House tried on Thursday to give another rough economic report a positive spin, saying that there's indicators of progress in newly released inflation numbers -- even as the Federal Reserve is expected to respond by aggressively raising interest rates once again.

The September Consumer Price Index report, which measures the changes in prices for a slate of consumer goods and services, released on Thursday showed that American consumers continue to be hit with higher prices despite unprecedented interest rate hikes by the Fed in recent months aimed at cooling the market.

The data from the Bureau of Labor Statistics showed that annual inflation rose by 8.2% in September, a slower increase than the 8.3% rise seen in August. Economists had projected the pace of price increases would slow to 8.1% last month. On a monthly basis, overall consumer prices increased by 0.4% from August.

After Thursday's CPI report was released, the White House pointed out that inflation over the past three months has averaged 2% -- down from 11% in the quarter prior to that. That's "progress," a White House official told CNN -- even as they acknowledged there is more work to do. Biden's official statement similarly reflected these sentiments, saying "even with this progress, prices are still too high."

While in California on Thursday, Biden also received a briefing from his economic team and directed them to keep him updated as conditions evolve. His economic team, a White House statement says, "reported that the United States remains in a strong position to bring down inflation and maintain a resilient job market," and that the President's economic plan is positioning the US economy "for stronger growth and investment."

The attempt to find the silver lining in the new inflation numbers highlights an ongoing and urgent political problem for President Joe Biden and his administration: Addressing Americans' economic fears and mitigating the potential ramifications in the midterm elections next month.

The stock market initially recoiled at the report -- Dow futures tumbled more than 400 points, or 1.5%, after the report was released, S&P 500 futures fell 1.8%, and Nasdaq futures were 2.6% lower -- but the market had roared back in late morning trading.

As they have been for months, administration officials are expected to continue emphasizing Biden's commitment to lowering prices in part by pointing to some of Democrats' recent legislative accomplishments -- such as the passage of the Inflation Reduction Act -- that the White House argues will, ultimately, help tackle inflation.

Inflation moderated in recent months in most part because of falling energy prices. The average price for a gallon of gas fell for 98 straight days in the summer to $3.68 from a record of just above $5. But prices have been creeping higher for nearly a month, rising to $3.91 a gallon, according to AAA. Meanwhile, food, shelter and other prices have been rising with no end in sight.

For the White House, the new data exacerbates a dual-pronged problem that has plagued the administration for months. Less than a month until Election Day, the administration's inability to secure a clear trend of deceleration in inflation -- quietly viewed as their primary goal in the lead up to voting -- underscores the political vulnerability Democrats face on an issue that registers in poll after poll as top of mind for voters.

The economy and inflation remain critical issues for voters just a few weeks out from the midterms. A new CNN poll conducted by SSRS showed 90% of all registered voters saying the economy is extremely or very important in deciding their vote on who to send to Congress, and 84% of voters saying the same on the issue of inflation.

Broadly, however, the numbers serve as just the latest data point viewed by the market as likely to drive the continued -- and unprecedented in recent history -- aggressive rate increases by the Fed.

While Biden and his team have publicly given the central bank the space to make its policy decisions without political interference, there is a keen awareness that the rapid pace of rate increases make it increasingly likely the moves will tip the US into recession. That would likely have the effect of undoing some of the clear gains officials point to for lower- and middle-income Americans due to Biden's major legislative wins.

A number of industry leaders and economic experts are warning of the possibility of a recession in the coming months, but Biden has insisted in public that he does not believe there will be a recession, saying this week: "I don't think there will be a recession."

"If it is, it will be a very slight recession. That is we'll move down slightly," Biden told Jake Tapper on Tuesday in an exclusive interview on "CNN Tonight." "It is possible. Look, it's possible. I don't anticipate it."