CEA'S JARED BERNSTEIN: New CPI Data Shows An Upward Trend in the Economy
(TSN): Inflation has dropped by 3 percent in the U.S., the lowest rate since 2021. Today's CPI drop is encouraging but the White House says their job is not done. Jared Bernstein of the Council of Economic Advisors speaking at the daily briefing said wages also went up in July increasing the buying power of working families. These numbers mean we are not in a recession.
However, many Americans are experiencing the "consumer crunch" that inflation brings. African Americans in urban areas have a greater challenge with supermarket redlining due to higher prices being imposed for fewer items. Pres. Joe Biden has continues be optimistic despite the financial burdens people are facing and repeatedly forecasts a 'soft landing" on the economy.
"The momentum is in the right direction, although there are no victory laps yet. Too many families are facing too many high costs...." Bernstein added. "We hear you."
Over time, positive changes in the CPI result in the cost of daily use items coming down. It takes a while to see price changes and requires the synthesis of several factors around consumer spending behaviors and purchasing probability based on data samples from urban consumers.
Items in the CPI "market basket" range form groceries to housing prices to gas.
Bernstein cited several areas where costs have dropped as a results of Biden Administration policies. Gas prices have declined to around $2.35 per gallon on average he said. He reminded reporters of when Pres. Biden released oil from the strategic reserve and convinced the leaders of other nations to do the same to quell gas prices. Air Fares are lower now than pre-pandemic.
The economics expert urged reporters to consider both prices and wages when assessing the downturn in the economy and pointed out how reporting on the economy tends to be negative according to research from the Brookings Institute.
