On Friday’s broadcast of CNBC’s “Squawk Box,” White House Council of Economic Advisers Chair Jared Bernstein acknowledged that the declines in the inflation rate just mean “prices are rising more slowly.” And “People want to see some deflation” where prices drop.
CNBC Senior Economics Reporter Steve Liesman asked, “I hear you on, there [are] certain remarkable things about the moment. But when we look at the polls of how people feel about the economy, they feel fairly lousy about the economy. And that’s because price levels are up and not going back down. How do you address that? How do you make people feel that the economy is better, when, in fact, in many cases, their wages are not equal to the rise in prices?”
Bernstein responded, “Well, on the last part, I’d probably hit you with a little bit of a fact check, which is that real wages have been going up.”
Liesman acknowledged that has been the case for the past “several months.”
Bernstein continued, “Look, it is a fundamental question, and I think a pretty straightforward answer, is that we’ve got to keep pushing against inflation. So, there’s disinflation and deflation. We’ve had very significant disinflation, going from a bit north of 9% on the CPI to 3.2 when last seen. But that just means prices are rising more slowly. People want to see some deflation. And we’ve seen some deflation. So, we have to keep working on that. At the same time, with real wages growing, that’s going to make a positive difference in people’s attitudes going forward. That’s my hypothesis.”
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