White House: Yearly Inflation Metric Distorted by ‘Factors’

On Thursday’s broadcast of MSNBC’s “Katy Tur Reports,” White House Council of Economic Advisers Chair Jared Bernstein argued that the year-over-year Personal Consumption Expenditures (PCE) inflation number is distorted, so you need to look at the last three months.

Bernstein said, “We have healthy consumers who are taking advantage of a historically strong job market. Unemployment’s been below 4% for a year and a half, strong job creation, and real pay gains. Now, I notice that you cited that year-over-year inflation number, and then went to the monthly consumer spending number. … The monthly inflation number ticked up .2%. That’s the same — that was for July. It was the same in June. The thing you want to do right now, because of some of the factors that distort the yearly number, is to look at the past three months. Now, over the past three months, the inflation gauge that came out today — and you’re right, it’s the one that the Fed looks at most closely — went up 2.1% at an annual rate. Now, that is awfully close to its pre-pandemic trend. So, we have easing inflation, a strong labor market supporting solid consumer spending, and the path is straight ahead based on those dynamics.”

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