On Thursday’s broadcast of CNBC’s “TechCheck,” White House Council of Economic Advisers Chair Cecilia Rouse reacted to the September inflation report by stating that the economy is cooling and “We know that people are starting to spend the excess savings they had during the pandemic. So, we know that the economy’s beginning to cool.”
Rouse stated, “Well, look, what we learned today was that we have a problem with inflation. The president understands that. We have understood that. What we do know is that we are not alone. Around the world, other countries are also wrestling with inflation. We, however, come at this with a position of strength, we had such strong growth last year. And if we look at what the Federal Reserve has — the challenge it has in front of it as it tries to bring down inflation while maintaining a strong labor market and strong employment, we know that we’re in a position of strength. So, we can see that, already, our economy is beginning to cool. Yes, this print suggested that this is a challenge. But we could also see that headline inflation’s come down, largely due to energy prices, but we also know that the labor market is starting to cool in a way that opens the possibility to a soft landing. Job openings are down, while layoffs have not really moved. Employment remains strong, but it is down from the beginning of the year. We know that people are starting to spend the excess savings they had during the pandemic. So, we know that the economy’s beginning to cool. But with the strength that’s there in household balance sheets and employment, we think that there’s some optimism, there’s a possibility for the Fed to nonetheless achieve a soft landing. But we understand inflation’s a challenge. It’s why the Inflation Reduction Act has been so important. It’s why the president’s focused on trying to reduce costs and prices for everyday families.”
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