On Monday’s broadcast of CNBC’s “Squawk Box,” White Home Council of Economic Advisers Chair Jared Bernstein acknowledged that it’s “fair” to point out that prices are still raised and things are still pricey despite the fact that the rate of inflation is decreasing, but said that questions about inflation harming President Joe Biden’s task approval numbers are “stale” due to the fact that “the approval ranking … conjures up a level of political tribalism that has a lot to do with things besides how the economy is doing.” And “the reality that inflation went from 9 to about 3%, is registering with folks, and particularly when it begins creating real wage gains.”
Co-host Joe Kernen referenced President Joe Biden’s low approval numbers on the economy and said just 36% approve of the President’s handling of the economy. He included, “I’ll tell you what I think it is, Jared. Inflation is– the rate of modification is coming down, however things that people bought two or three years back, because of the preliminary boosts, things are still costly. They might be going up less, and wage development just recently has actually begun keeping pace with that. So, individuals still seem like they’re behind. I think that’s got to be it. And I do not believe you can reject it. It’s probably not a good concept to reject that individuals are feeling that.”
Bernstein responded, “I am going to agree with you on this angle of when you get down and you drill down to what we’re actually doing, as opposed to these kind of more abstract 40,000-feet-up questions, 70%– 76% of individuals support the infrastructure law, the bipartisan facilities law, which’s certainly to fix highways that they drive on, broadband Internet that they utilize, tidy water that they drink. 72% assistance the CHIPS Act. And that’s undoubtedly crucial to, not only enhancing supply chains, but standing up the domestic semiconductor market here. About two-thirds support the Inflation Decrease Act. And by the way, there’s– a few of those statistics that I believe you’re pointing out are getting a little bit stale. So, University of Michigan belief is in fact at its greatest level because October of ’21, consumer self-confidence, highest level considering that July of ’21. A few of these things are starting to relocate the best instructions. And I believe among the factors for that is something else you stated, which is real wage gains. Look, I think you make a reasonable point in terms of how individuals feel about disinflation, which is less pleasing than deflation. However when you have genuine wage gains, basically, your consumption basket ends up being more budget-friendly, so that’s likewise moving in the best direction.”
Later, co-host Scott Wapner asked, “It’s quite telling, as we speak about GDP and the GDP now from the Atlanta Fed at 5.8, which was stunning, obviously, to everyone, any president who had numbers like that, a 5.8 GDP, earnings where they are, unemployment rates low, customers are strong, they’re keeping the train on the track, and going at a pretty good clip, and yet, the polling numbers, as we talked at the outset, are simply 36%. It’s a significant detach, obviously, but it also indicates the truth that inflation is driving the train, and as long as inflation stays– even if it remains where it is, it’s still sticky. And how do you compete against that narrative? Since otherwise, you could build a case that stated, you understand what? The economy’s respectable, however the people do not care because they’re tired of paying higher rates and they think the President is at least, in part, to blame.”
Bernstein responded to, “Look, I hear where you’re coming from, and I get this question all the time, however I seem like that line of questioning is beginning to get a little bit stale, and the reason I say that … is you have actually got to enter some of the guts of what these surveys are telling us. Now, I understand the approval rating, and I think that invokes a level of political tribalism that has a lot to do with things other than how the economy is doing. From my perspective, as the Chair of the CEA, look at the University of Michigan’s belief, it’s at its greatest level considering that October ’21, it’s been showing up, same thing with consumer confidence. Task satisfaction is at a 36-year high. The customer board complete satisfaction survey is the highest level it’s been since they started tracking that in ’87. You discuss inflation, inflation expectations are down in the University of Michigan survey. So, I believe, if you get under the hood, you look at some of the more current patterns. We’re beginning to see, particularly– and I believe it is disinflation, I think it’s the reality that inflation went from 9 to about 3%, is registering with folks, and specifically when it begins generating genuine wage gains. So, look, I believe the impressive thing in this economy that you didn’t discuss is we got all that inflation decrease without giving up anything thusfar on the joblessness rate, for connoisseurs of the Phillips Curve, that’s a no sacrifice ratio. Which’s a technique to get genuine wages increasing, preserve [a] tight labor market with alleviating inflation, real wage gains. That’s specifically what we’re seeing, and it’s starting to appear in a few of these survey numbers.”
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