(Bloomberg) — President Joe Biden’s administration remains “quite confident” that the fastest inflation in decades will be short-lived and abate once pandemic-fueled supply-chain and labor-market disruptions ease, according to one of his top economic officials.
The rising cost of living is a problem affecting Americans in their daily lives, particularly around the holidays as they pay higher prices for Thanksgiving turkeys and Christmas trees, and Biden understands the impact, Commerce Secretary Gina Raimondo said in an interview Thursday.
Biden’s administration also has the solutions, she said. They include expanding the labor market through job training; vaccinating more people against Covid-19 so that they can return to work; increasing employment of women through the Build Back Better Act’s expansion of child care and early childhood education; and investing in American semiconductor manufacturing and ports to address shortages of goods.
Her optimism comes amid data in recent months that have surprised Americans and policy makers. The U.S. consumer price index rose in October at the fastest annual pace since 1990. November data scheduled for release on Friday are forecast to show a further acceleration to 6.8% — the most since Ronald Reagan was president in the early 1980s.
“We still feel quite confident that this is a short-term problem, not a long-term problem,” Raimondo told Bloomberg News editors and reporters in New York. “It is still driven largely by disruptions in the supply chain and labor market that came about because of Covid. And so for that reason, we believe help is on the way, that things are going to get better.”
Raimondo is leading some of the Biden administration’s most important efforts to smooth out bottlenecks in supply chains, challenges that have been heightened by holiday season demand. Labor shortages, antiquated infrastructure, containers in the wrong places and free-spending U.S. shoppers have spurred an import surge that’s disrupted the flow of global trade.
U.S. wages and salaries are also increasing, with employment costs rising at the fastest pace on record in the third quarter as companies across a variety of sectors raised wages. Raimondo touted those raises as a positive for American workers. At the same time, they have failed to keep up with surging consumer prices.
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