SCOTT DETROW, HOST:
It is hot out there, folks. But one thing that is cooling off - inflation. Overall, inflation in June was at 3%, a whole lot better than the 9.1% we were seeing a couple of years ago. The cost of living actually fell in June compared to the previous month, and that hasn't happened since 2020. Lower gas prices did a lot of the heavy lifting to bring inflation down, but falling airfare and new and used car prices helped as well. Still, a lot of people continue to feel like life in America is too expensive. To talk about all of this and the White House's role in it, we are joined by President Biden's top economic adviser, Jared Bernstein. Welcome to the program.
JARED BERNSTEIN: Well, thank you for having me.
DETROW: This is big economic news, and I want to talk about it. But first, I have to ask you about the conversation dominating politics in the news right now. You regularly meet with President Biden. In your mind, can he do the job right now? Can he do the job for another four years?
BERNSTEIN: Unquestionably yes on both. And I'm glad you referenced my long-term relationship with the president because I've been briefing him on economic reports like this one, although not always as good as this one...
DETROW: Yeah.
BERNSTEIN: ...Since I was his chief economist when he was the vice president. And we always have great, sharp briefings where he asks pointed questions, and that's been the case in this administration as well.
DETROW: And you've seen no change in the last year or so, the time period a lot of people are focusing on?
BERNSTEIN: I haven't. The president continues, when I bring him economic data, to probe all the right questions. What's going to be the market reaction? How is this going to affect families like the one he grew up with in Scranton? How is this going to affect middle-class working families? What might this do to the people who are thinking about interest rates? So he continues to ask the same sharp questions. We continue to have the same, I think, very substantive briefings that we've always had.
DETROW: Well, let's talk about some of those issues that you frequently discuss. Do you think this good economic news makes interest rate cuts more likely this fall?
BERNSTEIN: Well, I know I just alluded to that in private conversations with the president, who, of course, is thinking about the role of interest rates, particularly in housing and mortgages.
DETROW: Yeah.
BERNSTEIN: But we don't get into the Fed's knitting here. What I would say is that if you listen to Chair Powell or - I heard a speech from Governor Cook from the Fed board recently. They're talking a lot about the kinds of dynamics that we see reflected in this report - inflation that has significantly eased from its peak, down two-thirds, actual price declines in June in cars and airfares, appliances, electricity, the gas price - all very important. So you're seeing a kind of a cooling in a couple of sectors that they look at and talk about a lot consistent with what the Fed has said they're looking for.
DETROW: You know how hard this has been for so many Americans, though. I'm sure that's something you think a...
BERNSTEIN: Yeah.
DETROW: ...Lot about. We actually - we did a story on how people are coping with inflation yesterday. My colleague, Scott Horsley, spoke to a new mother in Kansas City named Ellie Currence, and here's what she had to say.
ELLIE CURRENCE: Every time I go to the grocery store, everything's more expensive, which is a huge bummer because it's the essentials is that I need - you know, diapers formula, milk, eggs, bread. It's just hard. I work full-time. My husband works full-time. You know, I feel like, at this point, we're moving more towards survival mode rather than thriving.
DETROW: So what would you tell Ellie, who's framing the price of things as survival mode?
BERNSTEIN: Very pointedly, I would tell her that I hear her. I know exactly what she's talking about. And our mission here - and, again, I work closely with the president on these issues every day - is to address the very concerns that were just, I think, very well articulated by her. We have a cost-cutting agenda that targets her groceries, that targets any kind of junk fees or overdraft fees or credit card fees, airline fees, that takes down the price of prescription drugs and insulin costs. This is the cost-cutting agenda that the president has directed his team to be pursuing now for months and quarters on end.
What we're seeing in a report like this one is that we're making progress. We're on the right track, but we are not out of the woods yet. People like the shopper you just talked about - and she's not alone - still face prices that are too high. So continuing to make progress on this path is one of our main goals. I think, though, we should not lose sight...
DETROW: Yeah.
BERNSTEIN: ...Of the fact that a report like this shows that that progress is ongoing.
DETROW: We've got about a minute left. I want to hop to a few more specific topics here. Gas prices played a key role in inflation as a whole. They were going down. That was a big part of this good news. But we've seen prices climbing again in recent weeks, as they often do in the summer - any concern that that could affect this momentum?
BERNSTEIN: Well, as chair of the CEA, I'm pretty concerned about everything. There are banana peels any which way you turn. So, of course, we're watching that very closely. It's not an accident that the price of gas was held down in recent days over the holiday weekend. The president released a million barrel - I'm sorry - a million barrels of gasoline from a Northeast reserve. One other point on this - it's all - let's not lose sight of the fact that wages are beating prices now for 16 months in a row for middle-wage workers, and that kind of extra purchasing power is also helpful to folks like the person you played earlier.
DETROW: That's Jared Bernstein, chair of the United States Council of Economic Advisers. Thanks so much for talking to us.
BERNSTEIN: My pleasure. Transcript provided by NPR, Copyright NPR.
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