A very important economic advisor to President Joe Biden said that he thinks voters will worry less about the high cost of living over time if the government can control inflation.
On Tuesday, Jared Bernstein, head of the White House Council of Economic Advisers, said, “I put a lot of weight on the price level, not just inflation.” He was talking about the difference between how much something costs and how fast it costs more over time.
Even though inflation rates have dropped a lot since their peak in 2022, many everyday items are still more expensive than they were before the COVID-19 pandemic.
Bernstein said this at a Brookings Institution event in Washington, D.C., as he tried to explain why polls show Americans are unhappy with the economy even though inflation is going down, unemployment is low, and wages are going up.
He said, “If people remember that eggs used to cost $1.80 and now they cost $2.50, the fact that they are down from $5 doesn’t necessarily make them feel better” about the price hikes.
Bernstein also said that he doesn’t think this means the Biden administration is “permanently screwed,” since most prices will never go back to where they were before inflation.
He said that people will get used to higher prices over time, because “people like me would be walking around unhappy that gas doesn’t cost 60 cents per gallon, because that’s what it cost when I started driving.”
The Biden administration has made lowering the cost of living a key part of its campaign for president in 2024. Bernstein pointed out that grocery prices have gone down some.
Last week, the CEA released a report that showed grocery price inflation is “way down from its recent peak.” The report also said that wage increases have helped lessen the effect of higher grocery prices.
Several big grocery stores, like Aldi, Amazon AMZN, +0.41%, Target TGT, -1.95%, Walgreens WBA, -1.32%, and Walmart WMT, -2.15%, have also “recently announced price cuts,” the report said.
The report said that prices for many things in the United States have gone down, such as apples, ham, cheese, potatoes, coffee, and more. The Bureau of Labor Statistics says that grocery prices have gone up by 1% over the past year.
