President Joe Biden’s administration acknowledges that the prices of various products in the United States continue to be a challenge for the population, despite the fact that the economy has advanced more than expected.
“There are certain areas where we have continued to see price increases and cost of living increases that we are very focused on trying to address. For example, we have seen the cost of housing continue to rise in terms of rents, what people have to pay in terms of the monthly mortgage payments that people face when they buy a new home,” acknowledged Daniel Hornung, deputy director of the White House National Economic Council.
The exchange followed last week’s report on the U.S. economy’s 2.8 percent growth.
Hornung said there is a plan from the Biden administration to address housing issues, though there will need to be action from Congress.
“It is a plan that would provide financing to developers and builders to build two million homes and communities across the country that are affordable and of quality,” the advisor said.
They defend “price stability” in food
While rent, electricity and car insurance prices have risen faster than food over the past year, consumers are still facing higher costs at the supermarkets.
The increases vary depending on the product, according to statistics from the Department of Labor. The largest increase was in 2022 with 12.2%, but in 2023 there were more increases, 4.7%, while this year the increase is 1.1%.
Price increases are cumulative and continue to impact consumers’ pockets.
Although Hornung believes that there is a certain “stability” in costs.
“We have seen over the last several months that food prices have remained virtually unchanged or have decreased,” he said. “We have seen… price declines for things like new and used cars, price declines for certain items of clothing.”
The economic adviser, however, acknowledged that there are expectations regarding the upcoming economic reports.
“We want to continue to watch the inflation reports that we get in over the next few months, the employment reports that we actually get in to get a sense of how we’re doing in bringing down prices and inflation, and how we’re doing in maintaining a strong labor market with opportunities for workers across the country,” Hornung added.
Why was the economic growth a surprise?
Although the Biden administration acknowledges that it has sought to maintain stability in the economy, this week’s economic report also surprised them.
“The report… showed that the economy grew by 2.8% in the second quarter. That is, it is a stronger economic growth than expected, a stronger economic growth than in a normal economy,” he said.
Financial analysts had expected the economy to grow by around two percent, which is why the report turned out to be more positive.
“I think it really shows … that the economy continues to grow, you know, stronger than the forecasters thought it would, when President Biden and Vice President Harris took office, inflation continues to come down, wages continue to grow faster than inflation,” Hornung said. “But you know, President Biden and Vice President Harris, they also understand that there’s a lot more work to do to build an economy that works for the middle class, that works for working families across the country, lower costs for things like child care and housing, health care and prescription drugs.”