White House Economist Bernstein Predicts Inflation Will 'Drop Significantly'

The U.S. inflation rate climbed to 7.5% last month after another sharp increase in consumer prices, but that figure will "come down significantly in 2022," White House Council of Economic Advisers member Jared Bernstein predicted Thursday.

"That’s not just my expectation, that’s the expectation of every forecast I’ve looked at, and it’s very important," Bernstein said on CNN's "At This Hour."

"What the forecasts tell you is that the job market should stay tight and get even tighter supporting wage growth while inflation decelerates while it slows."

Further, Bernstein said that almost "every forecast" shows inflation is growing by about half as fast this year as it did last year."

He conceded that that rate could still bring the numbers above the Federal Reserve's target, but still, if that occurs, "that’s going to be a real sign that some of our interventions, some market interventions are helping to ease these price pressures.”

Inflation amounted to 7.5% for the 12 months ending in January, the greatest year-over-year leap since 1982, according to the Labor Department.

Consumers are feeling the pinch. Prices rose an eye-popping 41% for used vehicles; about 40% for gasoline, 14% for bedroom furniture, and 11% for women’s dresses.

The growing figure was attributed to shortages of workers and supplies, high amounts of federal aid, super-low interest rates, and robust consumer spending, according to Thursday's report from the Department of Labor.

But Bernstein insisted the data is "not quite as grim" as it may seem, as auto prices "did moderate a bit in January" and gas prices have come down slightly.

Real wages over the month from December to January were also slightly up and "beat inflation," he continued.

Still, everything possible must be done to alleviate the supply chain problems at the nation's ports and to ensure that items are "getting from ship to shelf" said Bernstein.

"We know that the time that containers are spending at the ports is down significantly over the past few months," he said. "We know that shelves are stocked only 2 percentage points below where they were before this pandemic. We know that our competition agenda is out there helping to encourage price savings to be passed along to consumers … if you get under the hood, some interventions are helping. The broad picture though is there is way more work to do."

Biden in December said he believed inflation was at its peak, and Bernstein explained that the White House's economic team, at Biden's insistence, "is focused on not just the month-to-month ups and downs, but on the underlying trends."

This means that there will be some months where reports are good and some where they are not, said Bernstein, adding that when Biden made his comments, "omicron wasn't going quite in the picture yet."

Meanwhile, the "Freedom Convoy" trucker protests against Canadian COVID mandates are continuing, and while the Biden administration supports peaceful protests "we can't have a situation where families don't get food to their tables and where supplies are blocked coming across main arteries," said Bernstein.

The administration is speaking with Canadian officials to try to deal with the supply chain issues that have been elevated by the convoy, he said.

Bernstein also appeared Thursday on Fox News' "America's Newsroom," where he insisted that there have been months where inflation has slowed, and months where it picked up, so "we have not tried to lean too hard into any one month precisely because of the uncertainty you get in these monthly reports."

But still, he acknowledged that "we need to do everything we can to keep wages up and prices down."

Bernstein also said it's a "very important question" about whether the White House will be looking ot the Fed to increase rates, and that the administration is "far from giving up" on legislation like the Build Back Better bill.

And when asked if Biden will ease on COVID-19 mandate rules to help loosen the economy, Bernstein said the administration will continue to "be driven by the science."

"We also have to pursue our legislative agenda," said Bernstein. "I don't want to lose that. Lowering prescription drugs, lowering healthcare premiums, and getting childcare to the American workers, is something that Democrats across the board support. We just have to find a way forward to legislate that."

He further refused to criticize the Fed for the economy.

"You are not going to get that kind of critique of the Fed from this administration," said Bernstein. "We stay out of their knitting."