Biden Dismisses Inflation Worries, Warns on Hiring Difficulties

“It really is a matter of people deciding now that they have opportunities to do other things,” he said. “People are looking to make more money and to bargain.”

Inflation has become a political liability for the White House in recent weeks. The U.S. experienced the largest surge in consumer prices in more than 12 years last month, with a Labor Department gauge rising 5.4% compared to one year ago.

“Inflation is driving the cost of everything through the roof,” Senate Minority Leader Mitch McConnell of Kentucky said at a news conference Wednesday opposing Democratic calls for Biden’s long-term social spending plan.

A significant portion of the recent inflation has been tied to areas of the economy experiencing parts shortages or surging demand stemming from reopening, including cars, hospitality and lumber — a point Biden has stressed and reiterated on Wednesday.

“It’s rational, when you think about it. The cost of an automobile is kind of back to what it was before the pandemic,” he said. Auto prices have driven much of the pickup in overall inflation though are in fact considerably higher than they were before the pandemic.

Republicans have also blamed Biden and Democrats for labor shortages at restaurants and other low-wage businesses, alleging unemployment benefits made more generous by rounds of pandemic relief measures are discouraging Americans from returning to work. Biden has said such businesses should offer higher pay in response, calling rising wages “a feature” of his economic plans.

Job openings have hit a record high even as unemployment remains elevated. In the hotel and restaurant industries, vacancies totaled 1.25 million in May, up from 807,000 in February 2020.

Biden on Wednesday suggested that policies such as an eviction moratorium as well as higher unemployment benefits have indeed kept some people from returning to work, saying that “we’re ending all those things” and “it will be interesting to see” what happens.

“A lot of people who work as waiters and waitresses decided that they don’t want to do that anymore because there’s other opportunities and higher wages, because there’s a lot of openings now and jobs and people are beginning to move,” Biden said.

His town hall remarks come at a key point in the debate over his $4 trillion economic agenda. Republicans blocked debate Wednesday on a $579 billion bipartisan infrastructure package championed by Biden. Senators working out details of the package say they are close to a final agreement, and key Republicans said they’d be willing to vote on the bill as soon as Monday.

Democrats also are pushing a $3.5 trillion budget blueprint that contains many of the president’s social spending priorities.

Republicans are seeking to make the increase in consumer prices a cornerstone of their argument against Biden and his handling of the economy. They warn his proposed long-term social spending and taxes on the wealthy would cause inflation to spiral out of control.

Source: Bloomberg Business News