Ordinary Americans across the nation have seen prices for a variety of goods rise considerably over where they were just a few months ago, spurring renewed fears of inflation as the COVID-19 pandemic wanes.
For at least one top official in the Biden administration, however, the situation apparently caught her unaware.
Rising prices and lower-than-expected employment numbers released last month came as a surprise to White House Council of Economic Advisors Chair Cecilia Rouse, as she explained in a recent statement.
The admission came in her remarks on Friday and in response to new economic data released the previous day.
According to CNBC, the Producer Price Index, which measures the prices companies pay to producers for raw goods and materials, had risen by about 0.6% from March to April, contributing to a worrisome spike of 6.2% over the same point in 2020.
The increase was roughly double what many economists predicted and came on the heels of an equally unexpected spike of 4.2% in the Consumer Price Index, which tracks what consumers are actually paying for goods and services.
Reports of inflationary pricing followed an April jobs report showing that only about 266,000 jobs were added to the economy last month — well short of the 1 million widely anticipated by the Biden administration and others. Early indicators suggest that the May report will similarly fail to meet expectations.
“They don’t change on a dime”
For her part, Rouse joined White House press secretary Jen Psaki during Friday’s press briefing and attempted to spin the economic news as positively as possible.
Acknowledging the price surge represented an “important question,” she noted that “even the Federal Reserve was a bit surprised by the jump” and that “the forecasters hadn’t expected that.”
She proceeded to list excuses for certain sectors and painted some of the increase on evidence of a recovering economy.
“We’ve never had a recession that was not tied to a problem in the economy, but that was tied to a health problem,” Rouse explained. “And so there’s even uncertainty about the recovery because our recovery is hitched to the — to the virus.”
Republican leaders have been predicting inflation for months as the Biden administration pursues a big-spending agenda, but Federal Reserve Chair Jerome Powell dismissed such fears in February, stating: “Inflation dynamics do change over time, but they don’t change on a dime, so we don’t really see how a burst of fiscal support or spending that doesn’t last for many years would actually change those inflation dynamics.”