The one-time red-hot US inflation is cooling without damaging the economy or jobs despite much talk of a recession hurting growth, President Joe Biden's economic adviser Lael Brainard said
WASHINGTON (Pakistan Point News / Sputnik - 13th July, 2023) The one-time red-hot US inflation is cooling without damaging the economy or jobs despite much talk of a recession hurting growth, President Joe Biden's economic adviser Lael Brainard said.
"The economy is defying predictions that inflation wouldn't fall absent significant job destruction," Brainard said at an event held by the Economic Club of New York on Wednesday. "Our economy remains very resilient and we are seeing inflation come down with a robust job market."
Brainard's comments echoed Biden's remarks from earlier in the day that inflation is falling while the US economy remains strong.
Brainard spoke after the US Labor Department reported on Wednesday that the Consumer Price Index (CPI) grew by just 3% in the year to June, expanding at its slowest pace in more than two years. The annual CPI was at 4% in May. A year ago, it stood at a four-decade high of 9.1% per year.
The Federal Reserve's tolerance for inflation is just 2% per year. In response to runaway price growth since the end of the coronavirus pandemic in March 2022, the central bank has raised interest rates by ten times, adding a total of 5% to the previous 0.25%.
Despite that, the US economy, as measured by its GDP, grew by an annualized 2% in the first quarter of this year, the Commerce Department said last week.
Even more assuring to the White House was the resilience of the job market, which saw an increase of 209,000 non-farm payrolls in June - keeping up with the hundreds of thousands of monthly job additions over the past three years after initially losing 20 million positions to economic disruptions forced by the pandemic measures.
Brainard called the CPI and payrolls data "new and encouraging evidence that the economy is on the path to moderate inflation accompanied by a resilient jobs market."
