1 00:00:00,040 --> 00:00:02,600 Speaker 1: We've got so much to discuss with this inflationary environment 2 00:00:02,680 --> 00:00:03,360 Speaker 1: core CPI. 3 00:00:03,480 --> 00:00:04,520 Speaker 2: Let's get back to it for a moment. 4 00:00:04,720 --> 00:00:07,320 Speaker 1: Ed The data they're coming in today basically matching estimates 5 00:00:07,320 --> 00:00:10,240 Speaker 1: and reinforcing that's that the Federal Reserve will have to 6 00:00:10,320 --> 00:00:13,800 Speaker 1: keep rates elevated to tame inflation in the longer term. 7 00:00:14,040 --> 00:00:15,920 Speaker 1: But in the here and the now, we just try 8 00:00:15,960 --> 00:00:19,080 Speaker 1: to really understand where we're dialing back on inflation. We 9 00:00:19,120 --> 00:00:21,080 Speaker 1: want to get the view from the White House Council 10 00:00:21,160 --> 00:00:23,799 Speaker 1: of Economic Advisors. To be precise, the member is Heather Bouchet. 11 00:00:23,840 --> 00:00:27,440 Speaker 1: You join us now and look consumer prices in general. 12 00:00:27,600 --> 00:00:30,280 Speaker 1: The print came in well where the market had seen it. 13 00:00:30,320 --> 00:00:32,639 Speaker 1: The headline take above expectations on the month a month, 14 00:00:32,720 --> 00:00:33,600 Speaker 1: just ever so slightly. 15 00:00:33,680 --> 00:00:35,880 Speaker 2: But hell, what was your read on today's print? 16 00:00:37,400 --> 00:00:39,680 Speaker 3: Well, certainly, as you noted, the headline was a bit 17 00:00:39,760 --> 00:00:41,120 Speaker 3: above market expectations. 18 00:00:41,120 --> 00:00:43,680 Speaker 2: But when you look at the whole report, you see. 19 00:00:43,440 --> 00:00:46,680 Speaker 3: That the pace of inflation, you know, in various parts 20 00:00:46,720 --> 00:00:48,960 Speaker 3: of the report, has been coming down in ways that 21 00:00:49,000 --> 00:00:52,720 Speaker 3: are really important for consumers. So, for example, the pace 22 00:00:52,760 --> 00:00:55,080 Speaker 3: of inflation for groceries are slower than they have been 23 00:00:55,120 --> 00:00:58,640 Speaker 3: in over a year. And you know that is consistent 24 00:00:58,720 --> 00:01:00,920 Speaker 3: with news that we were talking about right after Thanksgiving, 25 00:01:00,920 --> 00:01:03,720 Speaker 3: where the price of a Thanksgiving dinner was cheaper this 26 00:01:03,800 --> 00:01:06,280 Speaker 3: year than it was last year. And as we look 27 00:01:06,319 --> 00:01:09,199 Speaker 3: forward to the holiday season, you see that some goods 28 00:01:09,200 --> 00:01:11,280 Speaker 3: that are going to be important for families, sporting goods 29 00:01:11,400 --> 00:01:13,840 Speaker 3: or toys or things that they might buy for Christmas, 30 00:01:13,920 --> 00:01:17,319 Speaker 3: like televisions or whatnot, those prices have also the pace 31 00:01:17,400 --> 00:01:20,240 Speaker 3: is also slowed there as well, So there is some 32 00:01:20,319 --> 00:01:22,520 Speaker 3: good news for consumers in there. And you know, when 33 00:01:22,520 --> 00:01:25,560 Speaker 3: you look over the last quarter, the annualized rate of 34 00:01:25,640 --> 00:01:27,679 Speaker 3: headline inflation is about two point two percent. 35 00:01:28,480 --> 00:01:31,520 Speaker 1: I would say, though a lot of consumers don't feel it. 36 00:01:31,560 --> 00:01:34,360 Speaker 1: Now you've rightly pointed out that consumer sentiment has been 37 00:01:34,400 --> 00:01:36,840 Speaker 1: picking up in December, it's up about thirteen percent. I 38 00:01:36,840 --> 00:01:40,319 Speaker 1: think inforation expectations they've been dialing back. But well to 39 00:01:40,480 --> 00:01:43,160 Speaker 1: use on the day that we get yet another word 40 00:01:43,319 --> 00:01:45,160 Speaker 1: of the year. One word of the year has been 41 00:01:45,160 --> 00:01:48,320 Speaker 1: this vibe session, and the feeling is that people don't 42 00:01:48,320 --> 00:01:52,000 Speaker 1: feel great, even though the economy seemingly is going pretty great. 43 00:01:52,200 --> 00:01:54,960 Speaker 1: What do you say as an administration when that hits 44 00:01:55,040 --> 00:01:57,840 Speaker 1: hard on in a consumer that doesn't feel the way 45 00:01:57,880 --> 00:02:01,040 Speaker 1: that you're currently talking about this economy right now. 46 00:02:02,000 --> 00:02:03,160 Speaker 2: Well, let's be very clear. 47 00:02:03,280 --> 00:02:05,880 Speaker 3: The President has been clear, is economic team has been clear. 48 00:02:06,000 --> 00:02:08,360 Speaker 3: We understand that high prices have been hard on families 49 00:02:08,360 --> 00:02:11,720 Speaker 3: and that this is post challenges. Pocketbook questions are really important. 50 00:02:12,120 --> 00:02:13,960 Speaker 3: It's one of the reasons why when I looked at 51 00:02:13,960 --> 00:02:17,679 Speaker 3: this report today, we see actually that wages have now 52 00:02:17,760 --> 00:02:21,400 Speaker 3: been increasing faster than the pace of inflation for seven 53 00:02:21,440 --> 00:02:23,760 Speaker 3: months now, and we know that it takes some time 54 00:02:23,880 --> 00:02:26,280 Speaker 3: for things to you know, kind of for people's perception 55 00:02:26,320 --> 00:02:28,880 Speaker 3: of what's happening in the economy to resonate. We are 56 00:02:28,919 --> 00:02:33,440 Speaker 3: hopeful that as we see wages continued hopefully to outpace inflation, 57 00:02:33,720 --> 00:02:36,800 Speaker 3: that'll help people be able to get their family budgets 58 00:02:36,840 --> 00:02:37,920 Speaker 3: back under control. 59 00:02:38,200 --> 00:02:38,360 Speaker 2: You know. 60 00:02:38,480 --> 00:02:40,280 Speaker 3: The other thing we see, of course, is for the 61 00:02:40,480 --> 00:02:43,720 Speaker 3: eighty percent of workers in the economy that are production 62 00:02:43,800 --> 00:02:46,440 Speaker 3: and non supervisory workers, so not the managers, but the 63 00:02:46,440 --> 00:02:49,919 Speaker 3: production and non supervisory workers, they have fully recovered their 64 00:02:49,919 --> 00:02:52,240 Speaker 3: real wages back to where they had been pre pandemic. 65 00:02:52,560 --> 00:02:54,880 Speaker 3: So that's certainly good news. But we know that the 66 00:02:54,919 --> 00:02:59,920 Speaker 3: path to recover from this historic you know, virus in 67 00:03:00,000 --> 00:03:02,480 Speaker 3: induced recession that we had in all of the challenges 68 00:03:02,520 --> 00:03:04,320 Speaker 3: that we had getting back up online and the supply 69 00:03:04,400 --> 00:03:08,040 Speaker 3: chain challenges. So much work went into making things function 70 00:03:08,120 --> 00:03:10,480 Speaker 3: again in our economy, and hopefully as people go into 71 00:03:10,480 --> 00:03:13,600 Speaker 3: this holiday season, they'll see that prices are that the 72 00:03:13,639 --> 00:03:15,480 Speaker 3: pace is not as high as it was last year, 73 00:03:15,480 --> 00:03:17,560 Speaker 3: and that'll help with consumer confidence over time. 74 00:03:18,960 --> 00:03:20,680 Speaker 4: Heather, thank you for your time. It's ed here in 75 00:03:20,720 --> 00:03:24,760 Speaker 4: San Francisco. Our technology audience its workers just have one 76 00:03:24,880 --> 00:03:29,160 Speaker 4: very simple question, what specifics what areas are you seeing 77 00:03:29,200 --> 00:03:35,480 Speaker 4: the Inflation Reduction Act have a substantive impact in lowering inflation? 78 00:03:35,880 --> 00:03:38,880 Speaker 4: In other words, are there any specific data points you 79 00:03:38,920 --> 00:03:41,640 Speaker 4: can give us that show the IRA has worked. 80 00:03:43,040 --> 00:03:45,240 Speaker 2: Well? Let me just focus on one today. 81 00:03:46,080 --> 00:03:49,800 Speaker 3: So we saw in today's report on inflation that the 82 00:03:49,800 --> 00:03:52,320 Speaker 3: price of new cars has fallen for the past two months, 83 00:03:52,600 --> 00:03:54,840 Speaker 3: and in fact, actually it's fallen for four out the 84 00:03:54,880 --> 00:03:57,320 Speaker 3: last six months. And one of the things that we've 85 00:03:57,320 --> 00:04:00,360 Speaker 3: been tracking very carefully because of the inflation reduction is 86 00:04:00,400 --> 00:04:03,400 Speaker 3: what's been happening with US auto industry as we've made 87 00:04:03,920 --> 00:04:07,440 Speaker 3: these historic investments and in batteries and in electric vehicles, 88 00:04:07,800 --> 00:04:10,200 Speaker 3: and of course we've seen that the number of electric 89 00:04:10,280 --> 00:04:13,320 Speaker 3: vehicles has been rising, and we see that actually the 90 00:04:13,360 --> 00:04:16,520 Speaker 3: price of those cars, because there's now more competition, has 91 00:04:16,560 --> 00:04:18,800 Speaker 3: actually come down. So now the price of an electric 92 00:04:18,880 --> 00:04:22,200 Speaker 3: vehicle is about within three thousand dollars of a car. 93 00:04:22,520 --> 00:04:23,960 Speaker 2: Then that's before the. 94 00:04:25,480 --> 00:04:27,760 Speaker 3: Tax credit that families can receive to buy those new 95 00:04:27,839 --> 00:04:31,400 Speaker 3: electric vehicles. So that's one place where those investments are 96 00:04:31,480 --> 00:04:34,680 Speaker 3: helping to bring changes for consumers and families while also 97 00:04:34,720 --> 00:04:36,599 Speaker 3: creating good jobs here in the United States. 98 00:04:37,200 --> 00:04:39,320 Speaker 4: In that case, have a what is the White House's 99 00:04:39,400 --> 00:04:43,279 Speaker 4: reaction to the news overnight that Ford has cut its 100 00:04:43,279 --> 00:04:46,400 Speaker 4: production target for the F one to fifty lightning by 101 00:04:46,520 --> 00:04:50,240 Speaker 4: fifty percent twenty four And what they're saying is they're 102 00:04:50,240 --> 00:04:53,479 Speaker 4: simply matching their output to what is what they see 103 00:04:53,480 --> 00:04:54,880 Speaker 4: as being consumer demand. 104 00:04:56,279 --> 00:04:59,640 Speaker 3: Well, I can't comment on that today. In the details, 105 00:05:00,040 --> 00:05:03,640 Speaker 3: we are seeing these historic investments, you know, as a 106 00:05:03,680 --> 00:05:06,400 Speaker 3: result of the Inflation Reduction Act, we are seeing this 107 00:05:07,600 --> 00:05:09,960 Speaker 3: uptick in sales for electric fiels that we've seen in 108 00:05:10,000 --> 00:05:13,440 Speaker 3: the past. Of course, you know, it is challenging to 109 00:05:13,520 --> 00:05:16,680 Speaker 3: reshape an entire economy to build a nuclear energy, clean 110 00:05:16,760 --> 00:05:19,560 Speaker 3: energy economy. But knowing that the President has done what 111 00:05:19,560 --> 00:05:22,040 Speaker 3: he could do working with Congress to be able to 112 00:05:22,080 --> 00:05:24,159 Speaker 3: make sure that business has had the support they need 113 00:05:24,200 --> 00:05:26,680 Speaker 3: to be able to make these investments. That's where our 114 00:05:26,800 --> 00:05:28,200 Speaker 3: energy has been focused. 115 00:05:28,560 --> 00:05:32,200 Speaker 1: There is, of course, that tension that ultimately inflationary pressure 116 00:05:32,200 --> 00:05:36,120 Speaker 1: hasn't been helped by geopolitics, by trade, in particular, by 117 00:05:36,160 --> 00:05:38,640 Speaker 1: the fact that we are having to slow in some 118 00:05:39,000 --> 00:05:41,839 Speaker 1: ways the supply chain between the US and China in particular. 119 00:05:42,120 --> 00:05:43,960 Speaker 1: How much of a help or a hindrance is that, 120 00:05:43,960 --> 00:05:45,720 Speaker 1: particularly the moment we think of what's happening in the 121 00:05:45,800 --> 00:05:46,360 Speaker 1: chip sector. 122 00:05:47,680 --> 00:05:49,240 Speaker 2: Well, let me just say a couple of things. 123 00:05:49,320 --> 00:05:51,200 Speaker 3: You know, when you look at the pace of inflation, 124 00:05:51,800 --> 00:05:55,880 Speaker 3: and if you were to overlay price changes along with 125 00:05:56,040 --> 00:05:58,400 Speaker 3: changes in what has happened in the. 126 00:05:59,080 --> 00:06:02,200 Speaker 2: Supply chain in that we look to, you actually see. 127 00:06:02,040 --> 00:06:03,839 Speaker 3: That a big part of why we've been able to 128 00:06:03,839 --> 00:06:06,680 Speaker 3: get prices down, you know, right, they were at their 129 00:06:06,720 --> 00:06:08,800 Speaker 3: peak nine point one percent. Now we're at three point 130 00:06:08,800 --> 00:06:12,239 Speaker 3: one percent for headline inflation. When you look at that shift, 131 00:06:12,320 --> 00:06:14,880 Speaker 3: a lot of that mirrors these challenges that we saw 132 00:06:14,920 --> 00:06:18,000 Speaker 3: in supply chains as an outcome of the pandemic, and 133 00:06:18,040 --> 00:06:20,080 Speaker 3: as businesses had to get up and running and yet 134 00:06:20,120 --> 00:06:22,480 Speaker 3: there was still this virus around the world and upended 135 00:06:22,480 --> 00:06:23,719 Speaker 3: these global supply chains. 136 00:06:24,080 --> 00:06:27,000 Speaker 2: All the work that the President did to make sure. 137 00:06:26,760 --> 00:06:29,240 Speaker 3: That goods were able to be transported, to make sure 138 00:06:29,279 --> 00:06:31,920 Speaker 3: that the ports were working, that played a key role 139 00:06:32,400 --> 00:06:35,240 Speaker 3: in where we are today and getting prices down. And 140 00:06:35,279 --> 00:06:37,800 Speaker 3: of course global trade isn't a really important part of 141 00:06:37,839 --> 00:06:39,039 Speaker 3: those global supply. 142 00:06:38,800 --> 00:06:40,400 Speaker 2: Chains, Heather. 143 00:06:40,480 --> 00:06:43,360 Speaker 4: In the technology industry, there are still companies that are 144 00:06:43,400 --> 00:06:48,200 Speaker 4: reducing headcount and at the same time AI is driving 145 00:06:48,240 --> 00:06:51,600 Speaker 4: a number of postings which seems to be adding to 146 00:06:51,960 --> 00:06:55,599 Speaker 4: wage inflation because frankly, the numbers are astronomical on offer 147 00:06:55,839 --> 00:06:58,520 Speaker 4: to hire the best talent in AI. Does the White 148 00:06:58,560 --> 00:07:02,039 Speaker 4: House have any data that shows an AI impact on 149 00:07:02,120 --> 00:07:04,680 Speaker 4: the labor force and indeed the economy right now. 150 00:07:05,680 --> 00:07:07,880 Speaker 3: Well, at this moment, this technology is news, So I 151 00:07:07,920 --> 00:07:10,640 Speaker 3: can't We don't have like a specific estimate, but I 152 00:07:10,640 --> 00:07:12,880 Speaker 3: can tell you a couple of things. I mean, first, 153 00:07:13,120 --> 00:07:16,080 Speaker 3: this is an issue that the President takes seriously. In fact, 154 00:07:16,160 --> 00:07:19,040 Speaker 3: I believe today his AI Council is meeting and they're 155 00:07:19,040 --> 00:07:24,000 Speaker 3: having conversations about these technologies. But you know, one of 156 00:07:24,040 --> 00:07:26,600 Speaker 3: the things that we've seen in past instances where we've 157 00:07:26,640 --> 00:07:29,840 Speaker 3: seen new technologies, is that people's jobs tend to change, 158 00:07:29,920 --> 00:07:31,600 Speaker 3: and it works its way as it works its way 159 00:07:31,600 --> 00:07:33,960 Speaker 3: through the system. So we expect that, you know, as 160 00:07:33,960 --> 00:07:36,960 Speaker 3: these new technologies come online, that will ship the composition 161 00:07:37,040 --> 00:07:40,040 Speaker 3: of skills that workers need and how they're performing on 162 00:07:40,080 --> 00:07:40,480 Speaker 3: the job. 163 00:07:40,760 --> 00:07:42,600 Speaker 2: But just know that this is something. 164 00:07:42,360 --> 00:07:46,000 Speaker 3: That the administration is certainly focused on, as the President 165 00:07:46,040 --> 00:07:47,840 Speaker 3: is so focused on making sure that we're building an 166 00:07:47,840 --> 00:07:50,880 Speaker 3: economy from the middle out and bottom up and prioritizing 167 00:07:51,240 --> 00:07:54,520 Speaker 3: workers in our economic agenda. 168 00:07:56,800 --> 00:08:00,240 Speaker 4: Have Aboushi, the White House Council of Economic Advisors, thank 169 00:08:00,280 --> 00:08:00,880 Speaker 4: you very much.