During an interview with Bloomberg TV on Friday, White House Council of Economic Advisers member Heather Boushey stated that higher prices are “a challenge” “and it’s taken a while for things to get to a more steady state” after the pandemic, “And I think that has been hard on folks,” but there’s “a lot of economic news that indicates that people are optimistic.”
Boushey said, [relevant remarks begin around 1:11:30] “When inflation happens, all the prices go up. And then, you’re right, even as the pace of price gains slow[s] over time, it doesn’t mean that prices have come back down. Now, we have seen some cases of prices coming down, and that’s important. We talked a lot over last week, over the week of Thanksgiving, that the price of affording that Thanksgiving dinner was lower than last year. That’s certainly good news for families, giving them that little bit of breathing room. We, of course, have seen energy prices coming down, gas prices have fallen $1.77 from their peak at the height of the energy crisis that was caused by the unprovoked war that Putin has been waging in…Ukraine. So, that’s also good news for consumers, where they’ve actually seen those prices come down, but it does remain a challenge.”
She continued, “One of the things that we really need to focus on is that other side of the equation. Folks have jobs. We want to see those real wage gains, which, of course, we’ve been seeing for the past six months. So, families are able to rely on that income. They’re able to have that additional income that is now higher than the pace of inflation, as the pace of inflation has come down. And that’s giving families also a little bit of breathing room on the other side. Let me say one more thing here: For the president, it’s been really important that we focus on what we can do to lower prices that families are facing. So, for example, one of the early things the president did was made it possible for people to buy their hearing aids over the counter…his competition agenda. But that is a way to lower the prices facing families for things that are really important. For all the work that the president has done to make Internet affordable and to make sure that every family has access to [the] Internet. So, there are so many different examples of prices that the president has been able to lower through specific policy actions on top of the lowering of the pace of overall inflation.”
Co-host Romaine Bostick then said, “There’s what the president has done and there’s also, though, what the president communicates. And I’m sure, as you know, Heather, we could sit here and parse the data and see the disinflationary trend. But, for a lot of folks, we know they’re just looking at absolute price levels. And if you go to them, and you ask that proverbial question, are you better off now than where you were four years ago or even a year ago, there are a lot of people, rightly or wrongly, that are going to say no.”
Boushey responded, “I think of this in two big buckets: Number one, the pandemic was really challenging. And it led to this weird recession, a recession that I certainly haven’t seen over my career. A recession where you had inflation that was really pushed because of these supply chain challenges, these challenges of people being able to get the things they need after they’d been sent home and needed to — their lives were upended. And then we come out of this pandemic and things are more expensive and it’s taken a while for things to get to a more steady state. And I think that has been hard on folks, just how long it’s taken. It was easy to turn things off, it’s been a lot harder to work out all the kinks of turning everything back on again.”
She continued, “But I’m optimistic that the fact that so many people are entering the labor force, that we have these historically high numbers of labor force participation, that people have jobs, that they are out there, that folks are starting new businesses. It looks like 2023 will go down as the third-highest year of small business formation, that’s a lot of economic news that indicates that people are optimistic. And I’m not in any way saying that higher prices aren’t challenging, those are certainly challenging, but these have been challenging times overall. And, I think as people get back into those new rhythms, I think they’ll see the benefits. And, let’s note, we are seeing these historically large investments in communities all around the country. People are going to be able to drive across bridges that have been repaired.”
Boushey concluded, “Last Congress was a historic Congress. The president was able to get through — much of it in a bipartisan way — legislation that is historic and is transforming our economy, and we’re starting to see the fruits of that all across the country. … So, shifting an economy, especially after a historic pandemic, it’s going to take a little bit of time, but I think the president has a lot of things, concrete things that we can point to after this historic amount of congressional action in the last Congress.”
Follow Ian Hanchett on Twitter @IanHanchett
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