The stunning new inflation reading, which came out this week, has prompted a top Biden administration official to claim that the government must spend more money.
The updated consumer price index was published by the Bureau of Labor Statistics this week, showing a 9.1% year-over-year rate of inflation. The disheartening news is worse than any expert forecast.
What did Deese have to say?
Brian Deese, the National Economic Council’s director, said on CNBC that the CPI report was “backward-looking” and that it didn’t reflect what he’d seen in the previous 30 days.
In reality, the study’s findings point to the need for more investment, according to Deese.
“I just wanted to emphasize that if there’s one thing we can learn from this report, it’s that there is more urgency than ever in Congress to pass a bill to try and develop domestic semiconductors in order to lower the price of those products,” he added.
CNBC’s host Carl Quintanilla shot back.
“Although that brings us back to the circular debate, Brian, that more spending is not what you usually do when inflation is high,” Quintanilla said. “How can we break out of this loop?”
“Look, I believe you have to consider the unique circumstance that we’re in as an economy, and how do we build more supply and enhance our productive capacity so that we can really deliver more items at lower costs,” Deese responded. “We know what has to be done with semiconductors — we need greater supplies of those products.”
Deese was talking about a bill that would provide $52 billion in assistance for domestic semiconductor manufacturing, allowing American businesses to compete more effectively with China.
The bad inflation data was downplayed by President Joe Biden in a press release this week.
Surprisingly, the declaration pointed out that core inflation is at 5.9 percent. However, Jason Furman, a Harvard professor and an Obama administration adviser, stated that June’s core inflation number of 5.9% is “brutal” and it demonstrates why the new report is “atrocious.”