While December's Consumer Price Index (CPI) data came in hotter than expected month-over-month and annually, experts are finding this inflation print to be an inspiration for more to come under President Biden's economic policies.
National Economic Council (NEC) Deputy Director Daniel Hornung sits down with Yahoo Finance's Rachelle Akuffo to discuss the progress in Biden's legislation to ease inflationary costs for American consumers.
"The real wage growth... is important because over a sustained period of time now, about nine months, we have wages growing faster than prices," Hornung says on wage gains coming out of the pandemic. "Our view has been that as that continues to sustain itself that Americans will start to feel better about the economy.
Click here to watch the full interview on the Yahoo Finance YouTube page or you can watch this full episode of Yahoo Finance Live here.
Editor's note: This article was written by Luke Carberry Mogan.
Video Transcript
RACHELLE AKUFFO: And as you mentioned there, President Biden out with a White House statement saying there is much more work to do to lower costs for American families and American workers. But what are some of the ways that he can actually play a role in that versus what we already see naturally happening with the economy and inflation?
DANIEL HORNUNG: Well, we have seen real progress on certain key prices actually coming down over the last year as the economy has normalized, as President Biden's efforts to help fix supply chains and bring the private sector and labor together at our ports throughout the country has really worked its way through the system, as more Americans have gotten back into the labor force, thanks in part to the strong labor market that really his policies have helped bring about.
Looking ahead, he's going to be laser-focused on implementing historic legislation he's passed to lower prescription drug costs, to lower health insurance premiums, to lower clean energy costs. He's focused on taking on junk fees and doing everything we can to lower costs for the American people.
And that really is in stark contrast to what we're seeing right now from congressional Republicans, which is a focus on having trouble even keeping the government open, focusing instead of on lowering costs for middle class families, on tax cuts for the wealthiest Americans and the largest corporations. So that's a real contrast in front of the American people right now on the economy.
RACHELLE AKUFFO: And Daniel, when people are heading to the polls when they're deciding on a candidate, one of the things that really hits home for people is how they actually feel about their finances. And Axios and the Harris Poll came out with a survey. And they said of the people who feel the worst about their finances and about the economy, Republicans, rural residents, renters, women, and singles disproportionately feeling worse there. So how do you connect the dots between some of the progress that you're laying out in the economy but how people are actually feeling about that, considering that this is an election year.
DANIEL HORNUNG: Well, there's no doubt it's been a difficult several years for Americans coming out of the pandemic, coming out of the deep disruptions to global supply chains. I mean, we saw elevated inflation all over the world because of those issues. And so the president is really focused on doing everything he can to lower costs for families. The real wage growth I was talking about earlier is important because over a sustained period of time now, about nine months, we have wages growing faster than prices.
Our view has been that as that continues to sustain itself that Americans will start to feel better about the economy. They've felt good about their financial situation themselves for some time. But I think those real wage gains, those increases in wealth relative to the pandemic, that'll help folks feel better about the overall economy as well. And we saw some initial indications of that in the consumer sentiment data we got in December.