National Economic Council Director Brian Deese attempted to paint a rosy picture of the U.S. economy on Wednesday, on the same day the Labor Department announced inflation increased at the fastest rate in 40 years in 2021.
Deese said during a White House press briefing that the U.S. is in a “uniquely strong economic position” despite Americans encountering rising prices and empty shelves in stores across the country.
He instead crafted a story in which the U.S. had excelled economically last year, noting that it experienced the largest decline in unemployment, most jobs created and the strongest economic growth in nearly 40 years. However, he failed to acknowledge that those figures come in the wake of record destruction on the economy brought on by the early days of the Covid-19 pandemic.
Biden's NEC Director Brian Deese says the U.S. is in "a uniquely strong economic position" despite higher prices, empty shelves, and wage gains being wiped out by inflation. pic.twitter.com/snYMvLo3It
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“Given the unique strength of the United States economic recovery overall growth as well as the labor market we are well positioned to attack the challenges of prices and costs head on,” Deese said.
Wednesday’s Labor Department report showed that the consumer price index, a major inflation gauge, for all items surged 0.5 percent in December and 7.0 percent for the last twelve months ending in December, representing the largest annual spike since June 1982, when inflation hit 7.1 percent.
Deese said members of the press gave outsized focus to the annual 7 percent rate increase.
“If we are trying to look where we are headed to, the month-to-month changes are more instructive and most independent forecasters continue to project that we will see moderation in price increases over the course of 2022,” he said.
Deese called the price increases a “global phenomenon” that “reflect the nature of the global challenge of coming through a pandemic crisis” and recovery.
He dodged a question about what he and other economic experts got wrong in predicting early last year that inflation would be short-lived, saying instead that other projections and forecasts came out differently than anticipated but for the better, such as employment.
“This is a global phenomenon it is connected to the pandemic and the issues that has raised, certainly the supply chain challenges that have evolved over the course of time through the delta variant and over the course of the fall have been issues that we’ve had to go and tackle head on but I think the nomenclature aside we find ourselves a position now where we are looking for a most forecasters are projecting that the price increases will moderate,” he said.
Federal Reserve Chair Jerome Powell testified before the Senate Committee on Banking, Housing, and Urban Affairs on Tuesday that monetary policy is limited in its power to curb inflation by the current era of persistently low interest rates.
“The economy has rapidly gained strength despite the ongoing pandemic, giving rise to persistent supply and demand imbalances and bottlenecks, and thus to elevated inflation. We know that high inflation exacts a toll, particularly for those less able to meet the higher costs of essentials like food, housing, and transportation,” he said.