Inflation continues to weigh on the minds of many Americans
and the problem likely is not going away anytime soon
. Data from the labor department revealing that prices increased
by 7.9% in February Marketing the fastest pace of inflation
in over 40 years. Heather Boucher joins us now
. Member of Council of Economic Advisers at the White
House, nice to have you here. I really
appreciate you taking the time. There we go.
Got your shot. Obviously the conflict in Ukraine rising
gas prices have been dominating the news as of late
on the economic front. How much of recent events
contributed to the data we saw today? What should
we know? Well that is certainly the question on
everyone's mind. Let me just clarify that the 7.9%
is over the past 12 months. So um it's
not that it's increased that much in one month but
over the past 12 months and that is certainly having
an impact on families budgets. And of course the
situation in Ukraine, this unprovoked attack of by Russia
on on on Ukraine and the Ukrainian people is certainly
having an effect on energy prices and also perhaps um
soon on food prices. You know, Ukraine is
a large producer of wheat and of course Russia exports
oil. Um and I think the important thing to
note is that these prices especially for energy when it
comes to boston fuels these prices are global prices and
so they they play a role in families budgets.
And so this is something that we are watching very
closely, making sure to the extent possible that americans
are protected from these price increases. But knowing that
because of this action that Putin has taken um this
is affecting americans and people around the world. Do
you have any expectation? I mean, listen,
the kitchen table issues the things that people heather are
spending money on when it comes to gas, bad
gas, food, basic goods, the prices have
increased and the expectation is oftentimes they will continue to
increase. What sort of guidance can you possibly give
the American people with regards to an eye to the
future? You and I are having this conversation on
March 10. What does the rest of the year
look like between today and and the end of 2021
? You think or 2022 rather, Pardon me.
Yeah, well here's the thing, we are entering
the situation with the with many parts of the economy
in really good shape, right? We've created 7.4
million jobs since the president took office a little over
a year ago. We have the unemployment rate back
down to 3.8% and that means um and on top
of that, because of steps like the american rescue
plan. Household balance sheets are looking pretty good going
into this crisis now, of course we've had this
inflation that's been happening all year because of the challenges
with supply chains because of the historic pandemic. So
it's seeing these new price rises because of the Russian
invasion of Ukraine because of Putin's actions is certainly something
that we are watching and that is likely to lead
to higher energy prices, especially if you rely on
fossil fuels, you buy gas at the pump for
you, um, you know, have gas to
heat your home or run your, your oven or
something like that. Um, so these certainly are
issues that were watching. But forecasters at this point
believe that the american economy will be resilient. They're
still predicting that the unemployment rate will continue to be
lower at the end of the year than it is
today. And we are still seeing and folks believe
that over time prices will come back down. Um
it all depends on how long this shot glass and
it depends, you know, quite frankly on our
ability to um to work through it. So starting
from this strong position, the president has taken a
series of steps To protect the American economy and American
families working with our allies, we've released um uh
, the announcement of 60 million barrels of oil from
the strategic Petroleum Reserve. So that can certainly help
put a little bit of flexibility into the system to
help keep those prices in check. But um,
you know, the most important thing we need to
do is to think about how the United States can
become independent of these kinds of global forces. And
that requires us continuing this move towards clean energy.
So heather let let let me cut through a bit
of the responses here and that I I hear you
and other White House officials repeatedly and I understand why
refer to this as Vladimir Putin's gas price hike.
The messaging from the White House is very intentional.
You are deliberately trying to convey to the average american
voter that yes, there are other issues and prices
were already rising. But you really, you the
average american, you need to know that this is
Vladimir Putin's fault for X Y. Z. Reasons
. And even if republicans support largely what you're trying
to do heather, you know, as well as
I do, we are 243 days out between now
and the midterms republicans are going to weaponize the increase
in prices against joe biden and use this as a
political albatross around the neck of democrats, what does
that message you need to look like? So that
american voters around the country are are convinced that this
is an issue that is largely outside of the purview
. There are this is GOP political in nature,
this is global in nature instead of how, you
know, the GOP is gonna weaponize this and say
this is joe biden's fault because you know, they
will continue to say that Well, here's the thing
, I'm an economist, so I'm gonna start pointing
it backs. So one of the things we know
is that yes, energy prices are always volatile.
That is what it means to rely on a global
energy market because we rely on fossil fuels. Those
markets are global prices are volatile. But because of
these steps because Russia is such a big oil exporter
that volatility has gone sky high, you've seen sharp
increases of gas at the pump because of the actions
that Russia has taken. And because the United States
and all of our allies, all these countries around
the world have said this is this is wrong,
you can't do this to the Ukrainian people. So
I think we want to start there and look at
the trends and what you've seen is a sharp uptick
in prices, especially since this invasion of Ukraine.
But I think that the second step here is that
the only way to really get out of this situation
where we are beholden to the volatility of global oil
prices is to continue to push to make the U
. S. Economy um have that true energy independence
. And that requires moving towards clean energy sources which
we can produce here at home, bolstering us manufacturing
, creating jobs and um and not having a subject
to these volatile oil prices. That is where true
economic security lies. Um You know, the other
thing that we're going to hear is that, you
know, we need to quickly ramp up production.
There's certainly steps that um you know, all options
are on the table and we need we do need
to be thinking about all of these options in the
short term, but we also need to remember that
um, the oil companies have been making a lot
of profits. They have a lot of opportunity to
ramp up production and to, to take steps to
help make sure that we meet the demand for the
american people. So heather. Is there anything else
that can be done in the short term to help
bring down prices, any other arrows in the quiver
, so to speak? Well, the administration continues
to focus on doing what we can to unsnarl those
supply chains, the efforts that the president took.
Um, have we have seen a significant effect of
those? We've seen imports up at ports, We've
seen that measures of um, inventories on shelves are
almost back to pre pandemic levels. So that work
is ongoing to make sure that all of those other
parts of our economy are, are working functionally in
terms of the supply chains. You know, the
administration is always also making sure that americans are paying
fair prices when they go to the store and where
they go to the pump. Um, you know
, the President has asked the Federal Trade Commission to
make sure that they are investigating whether or not the
prices that you pay when you pump that gas into
your car are fair and that there is a price
couching going on. So, um, we're taking
all of these steps to make sure that the prices
that we pay our fair, um, that the
supply chains work and that we're doing what we can
to insulate the american people. But here's the thing
, as the President said, these are tough times
because of the steps that Putin has taken with this
unprovoked invasion of Ukraine and heather. There's been a
bit of a debate here in Washington, you know
, as well as I do, are you confident
that americans by and large, at least the majority
of americans would be willing to pay a little bit
more if it means holding in the case of Russia
is someone like Vladimir Putin a bit more economically accountable
. Well, I leave that to folks to leave
that to the american people to to tell you about
. I think, you know what, what we
are seeing is that, you know, our national
security and our economic security really does depend on us
not being beholden to folks like Vladimir Putin Putin.
And um and so I think the steps that the
administration has taken, you know, speak for themselves
, really trying to make sure that we can move
towards that true energy independence. All right, heather
boucher is a member of the Council of Economic Advisors
at the joe biden White House. It is so
great to have the perspective of someone in the administration
heather. Thanks a lot for taking the time for
the show this afternoon. Nice to have you