People Feel Good About Their Finances, But Companies Need to Lower Prices

White House National Economic Council Director Lael Brainard said on Friday's NPR broadcast “All Things Considered” that Americans are generally satisfied with their personal finances. “But at the same time, when Americans look at a certain price, it's not going down. That's why we're going to continue to fight to bring those costs down.” “Now that costs are falling, it is critical that companies pass those savings on to consumers.” And we think that will go a long way toward continuing the rise in consumer confidence that we've seen today. ”

Co-host Ari Shapiro asked, “Despite a strong job market, rising wages, and falling inflation, don't Americans think the economy is in good shape?” A majority of respondents told Gallup last month that they believed the economy was getting worse, and that has been the case nearly every month of Biden's tenure. How do you explain this disconnect? ”

Mr. Brainerd replied: That's why the president is so focused on the fight to lower costs for hard-working Americans. For example, the president believes it is wrong that prescription drugs are virtually unaffordable for many Americans, which is why he is working to reduce health care costs. He passed great legislation that capped insulin costs for seniors at $35 a month. For many he will fall below $400. As you know, we cap out-of-pocket drug costs for seniors at $2,000 per year. And Medicare now has the power to negotiate prices on 10 drugs starting next year. ”

Shapiro then asked, “Yet about three-quarters of Americans are telling Gallup that things like insulin prices are to blame for the bad economy. Do you agree? ” he asked. The question seems broader than that, but I think the answer comes from a broader sentiment than that. ”

Mr. Brainerd replied: “Actually, this morning we found a survey out of Michigan that showed a really big uptick in consumer sentiment. And I think consumers are very focused on the costs that are most important to them. Healthcare. Affordability is a big issue for many Americans. But consumers are also tired of being hit with hidden fees, which can affect everything from airline tickets to credit card and overdraft fees. , are cracking down on junk fees on everything. And this is also very important: Now that supply chains are fixed and input costs are falling, companies need to pass those savings on to consumers. Yes, and we think that will go a long way in continuing the rise in consumer confidence that we've seen today.”

Shapiro then said, “As an economist who focuses on the numbers and acts on data, personally, when I look at these consistently positive unemployment reports, I don't think Americans think the economy is bad.'' Do you find it puzzling to see numbers that consistently show that It feels like a yawning crack. ”

Mr. Brainerd replied: “That's a good question, but it's a much more complicated picture than that. If you look at Americans' attitudes toward personal finances, more than two-thirds of Americans actually feel that their personal finances have improved. This makes sense since median household wealth has increased by about 37% since the pandemic. And it's also true that wages have risen more than inflation. So people are actually getting more It gives us a lot of leeway. But at the same time, when Americans look at certain prices, they're not coming down. That's why we're going to continue to fight to bring those costs down.”

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