Biden Adviser Sperling: August Inflation Report Not What Anyone ‘Wanted to See,’ But Year-over-Year Fell and Things Will Improve

On Tuesday’s broadcast of Bloomberg’s “Balance of Power,” Senior Adviser to President Joe Biden Gene Sperling said that the August inflation report is “not the report that I think anybody wanted to see,” and failed to meet the expectations of the market, but “headline inflation has basically been flat for two months in a row.” And the year-over-year number declined. Sperling also argued there are some things that might take time to work their way into the Consumer Price Index (CPI) and there are “a lot of signs that core inflation will be moving in the right direction.”

Sperling stated, [relevant remarks begin around 34:50] “One cannot deny that we were hoping for better. I think everyone was hoping for better on the core inflation numbers. That said, while this didn’t meet, obviously, the market’s expectations, and not our hopes either, it’s important to recognize that, basically, inflation has been — headline inflation has basically been flat for two months in a row. You still saw the number — the year-over-year number come down. You see positive places like gas prices were down 8% in July, 11% in August, overall energy prices are down 5%.”

He continued, “And I don’t want to do what I always promise not to do, which is try to project to the future, but I do think there are some things that are happening now, the increase in inventories that I think is leading to discounting. I think some of the cooling in housing prices and some of the evidence we’ve seen on even rental prices starting to retreat a little may take a little while to work their way into the CPI number. And we saw an increase of almost 800,000 in labor force participation, and in some areas like airfares, etc., where we did actually see prices continue to go down. So, it’s not the report that I think anybody wanted to see, but I also think it’s worth recognizing that we basically have seen flat inflation for two months in a row, and that there are, I think, still a lot of signs that core inflation will be moving in the right direction.”

Sperling also said the Inflation Reduction Act will reduce prices.

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