On Friday’s broadcast of NPR’s “All Things Considered,” White House National Economic Council Director Lael Brainard stated that Americans are generally happy with their personal finances “But, at the same time, when Americans look at particular prices, they’re not coming down. That’s why we are going to continue fighting to bring those costs down.” She also stated that “it’s also really important, now that we have fixed supply chains and input costs are coming down, corporations need to be passing those savings on to consumers. And we think that will go a long way to continuing that increase in consumer sentiment that we saw today.”
Co-host Ari Shapiro asked, “So, despite the strong job market and rising wages and falling inflation, Americans do not think the economy is good. A majority of respondents told Gallup last month that they think the economy is getting worse, and that has been the case for almost every month of Biden’s time in office. How do you account for this disconnect?”
Brainard answered, “Well, while the jobs picture is very bright, we know that many Americans are worried that some things are not affordable. And that’s why the president is so focused on fighting to bring down costs for hard-working Americans. For instance, the president believes it just isn’t right that prescription drugs are practically unaffordable for many Americans, and that’s why he’s fighting to lower healthcare costs. He got great legislation to cap insulin costs for seniors at $35 a month. That’s down from $400 for many. You know, we also are capping out-of-pocket drug costs for seniors at $2,000 per year. And Medicare has the authority now to negotiate prices, starting with ten drugs next year.”
Shapiro then asked, “And yet, do you think, when roughly three-quarters of Americans tell Gallup the economy is getting worse, it’s because of something like insulin prices? The question seems to be broader than that, and I would think the answer comes from a sentiment that’s broader than that.”
Brainard responded, “Well, actually, this morning, we saw a really big jump up in consumer sentiment in the Michigan survey. And I think consumers are very focused on the costs that matter most to them. Health care is a huge affordability issue for so many Americans. But consumers are also tired of being hit by hidden fees. That’s why we’re cracking down on junk fees in everything from airline ticketing, to credit cards, to overdraft fees. And it’s also really important, now that we have fixed supply chains and input costs are coming down, corporations need to be passing those savings on to consumers. And we think that will go a long way to continuing that increase in consumer sentiment that we saw today.”
Shapiro then asked, “Do you find it puzzling, just personally, as an economist who is focused on numbers and driven by data, to look at these consistently positive unemployment reports and see the numbers consistently say Americans think the economy is bad? It just feels like such a yawning chasm.”
Brainard answered, “It’s a good question, it’s a much more mixed picture than that. If you look at Americans’ attitudes towards their personal finances, actually, more than two-thirds of Americans feel that their personal finances have improved. And that makes sense because wealth is up by about 37% for the median household since the pandemic. And it’s also true that wages are up more than inflation. So, people can actually afford more. But, at the same time, when Americans look at particular prices, they’re not coming down. That’s why we are going to continue fighting to bring those costs down.”
Follow Ian Hanchett on Twitter @IanHanchett
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