Inflation still Biden's "top priority," Bernstein says
Uncomfortably high inflation remains President Joe Biden’s “top domestic priority,” White House Council Member of Economic Advisors Jared Bernstein tells Axios on Wednesday, especially because consumer demand remains strong.
Why it matters: Recent data suggests that price pressures in the U.S. economy – which the Federal Reserve has been trying to defeat with higher interest rates – may finally be moderating. Bernstein tells Axios’ Courtenay Brown that, while the Biden administration was reluctant to call a peak, inflation appears to be heading in the right direction.
- “I think there's just too much uncertainty in this climate. But again, the trend is our friend and it's not just a monthly blip. We've seen a number of months of these improvements,” he said.
Driving the news: Inflation remains high primarily because companies have pricing power, and consumers still want to buy — with credit card spending a key driver.
- On Wednesday, data showed October retail sales jumped by a better-than-expected 1.3%, underscoring how demand is keeping price pressures bubbling.
Despite economic worries that failed to boost Republicans in the midterm elections the way polls suggested, inflation and a potential downturn remain top of mind for voters.
- Bernstein’s remarks suggest the Biden administration remains acutely aware of the political ramifications of appearing indifferent to consumers struggling with soaring prices.
- The Inflation Reduction Act passed this summer was meant to address price pressures, but did little — if anything — to improve the outlook.
What they’re saying: “One thing to keep in mind is that the American consumer just keeps ticking and consumer spending is 70% of this economy,” Bernstein says.
- “So as long as …the consumer's in play, even while she's pulling back some understandably….The path to a more steady, stable growth environment is definitely open.”