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White House Economic Adviser On Inflation, Delta Variant And Recovery


We're going to spend the next minute or so reviewing some numbers.


Seven hundred twenty-six - that's the number of points the Dow Jones Industrial Average dropped yesterday. That's about 2%.

KELLY: Five point four - that was the inflation rate in June.

CHANG: One hundred sixty-one million - the number of Americans who are fully vaccinated. That's just under 50% of the population.

KELLY: And 70 - seven zero - that is the percentage increase of new COVID cases in the U.S. in just one week, an increase largely driven by the delta variant.

CHANG: Jared Bernstein is someone who pays very close attention to these kinds of numbers. He's a member of the White House Council of Economic Advisors and joins us now.


JARED BERNSTEIN: Oh, thanks for inviting me.

CHANG: Thanks for being with us. OK. Let's start with that tumble in the stock market yesterday. And I get how the stock market is not the economy, but, I mean, that drop does reflect concerns from investors about how a resurgence in COVID-19 could affect economic recovery. So I'm wondering, do you share those concerns about the delta variant?

BERNSTEIN: Well, I think if you're talking about yesterday's tumble, then you also have to talk about today's recovery, where the stock market made up most of that ground. So at some level, this is the kind of noise that goes on in the background. I think what's most important to reflect on - particularly today, which happens to be six months since this president took office - is the recognition that our country and our economy are in a far stronger place than we were when he took office six months ago. At that point, of course, we were at a gigantic jobs hole. And with his leadership, with the vaccination campaign, with shots in arms and checks in pockets, more than 3 million Americans are back at work. Unemployment claims are down by more than 55%. Those are some other numbers for your list. And over...

CHANG: That said...

BERNSTEIN: ...Two-thirds of adults are vaccinated. So I think we need to also...

CHANG: That said...

BERNSTEIN: Yeah, sure.

CHANG: The White House today just reported an unnamed fully vaccinated official tested positive for COVID. Here in LA County, they're reimposing mask mandates. Meanwhile, the delta variant, I mean, it is surging internationally, which could hurt the global economy. Why do you think the U.S. economy, which is coming out of a steep decline, can weather all of this?

BERNSTEIN: I think a lot of that has to do with the Rescue Plan because this plan, which was passed back in March, is so long-lasting with a set of time release features that probably aren't as well appreciated as they will be in coming weeks and months. It was a plan that was designed to ensure that we had the foundation to deal with whatever kinds of flare-ups would hit us. So cities and states now have lasting support from the government to maintain and to expand their vital services. Those include emergency rental assistance, to keep schools and child care centers safely open. Families are now getting tax cut breaks each month, families with kids, through the child tax credit. So I think one reason why we are just, you know, very confident that we're not going back to the kind of economic situation that greeted this administration six months ago is because of the measures that we've put in place.

CHANG: Well, let's talk about inflation because there was a jump in inflation in June. Prices were up 5.4% compared to a year ago. Now, White House officials have said that this price spike is only temporary. Are you still confident that this inflation we're seeing is just a temporary blip?

BERNSTEIN: I think the way to - we see it is that it's important to recognize that Americans are facing and feeling higher prices. Those higher prices are on food, on gas, on cars, housing. And that's something that - there's a common thread between all those factors. All of them are pandemic-related areas. That is, if you look at, say, cars, which, by the way, you see this is a global problem coming from a shortage of semiconductors. It now takes about a hundred of those semis to build a car. This is clearly related to the pandemic. So if you believe, as we do - and virtually every other forecaster, including the Federal Reserve and the Congressional Budget Office - that these supply chain constraints will ease and in fact are already beginning to ease in some cases - we've seen the used car index tick down a bit, certainly lumber prices are down 60% from their peak - then, yes, we expect that these supply chains will come back kind of...

CHANG: There are...

BERNSTEIN: ...Back to life.

CHANG: There are people out there, including former Treasury Secretary Larry Summers, who worried that aggressive federal spending this spring on short-term relief programs could lead to inflation. Do you think this inflation is proof that Summers had a point?

BERNSTEIN: I think the important thing to do there is to tie together the two parts of our conversation. I just told you that we have in place - because of the American Rescue Plan - a plan that, you know, some critics, including Larry, said, you know, was too big. We now have in place the measures to deal with the kinds of challenges we're facing now from the new variant or, frankly, from just digging America out of the economic and health crisis hole that met this administration six months ago. States and localities have the resources to distribute this safe and accessible vaccine. Now we have to do more...

CHANG: Right.

BERNSTEIN: ...Work to make sure we keep getting shots in arms, but those plans...

CHANG: All right.

BERNSTEIN: ...Are effectively in place. And I don't think you can separate one from the other.

CHANG: That is Jared Bernstein, a member of the White House Council of Economic Advisors.

Thank you very much.

BERNSTEIN: Sure. Transcript provided by NPR, Copyright NPR.