On Thursday’s broadcast of CNN’s “New Day,” White House Council of Economic Advisers member Heather Boushey responded to questions on why Canada, France, Italy, Japan, India, Mexico, and China have lower inflation rates than the U.S. by blaming “global” problems of the pandemic, supply chain issues, and energy. She also stated that “countries have their baskets of goods and particular things affecting their economies” and some other countries have higher inflation rates than America.
Co-host John Berman asked, “Gas prices have dropped 29 straight days. But Americans are going to need that extra money from the gas prices because the core rate of inflation, month-to-month, actually creeped up a little bit, which means everything else besides food and gas prices actually [rose] a little bit there. And one thing I also want to point out is, based on the last measurements from other countries, the rate of inflation in the U.S. is higher than it is in Canada, France, Italy, Japan, India, Mexico, China. Why?”
Boushey responded, “Well, here [are] a couple of things. I mean, first off, let’s be clear, the bulk of the increases in prices last month were due to energy and food, and most of that was indeed due to energy. And so, this is really the result of the United States and countries everywhere coming out of a historic pandemic where we have seen these ongoing challenges with supply chains, these fragile supply chains that businesses have created around the world that have made it difficult to get products to shelves in the time of this recovery from a pandemic. You add on top of that this unprovoked war that Putin has been waging in the Ukraine and that is why we’ve seen prices rise. So, these gas prices — and, again, as you pointed out, this is a global [phenomenon]. Again, coming out of the pandemic is global, the supply chain challenges are global, and the energy challenges are also global.”
Berman followed up, “Absolutely, there’s no question about that, but the countries I just listed that have lower year-to-year rates of inflation at last measurements, they’ve all been hit by the pandemic and by energy prices as well and I’m just trying to understand why it’s a higher rate of inflation here in the United States.”
Boushey answered, “Well, there are other countries that do have higher rates than the U.S. I mean, certainly, countries have their baskets of goods and particular things affecting their economies. But overall, what we see is this global trend towards higher prices and you see many countries that are reaching record peaks like the United States, and, again, it is because, in large part right now, because of this energy crisis.”
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