In an economic address Monday, President Joe Biden addressed concerns surrounding persistent inflation. The president said the notion of continued inflation does not align with the administration’s expectations, citing falling lumber prices as one example of a return to normal pricing.
“The reality is, you can’t flip the global economic light back on and not expect this to happen,” Biden said. “As demand returns, there’s going to be global supply chain challenges. We’ve seen that in semi-conductors, which are used in automobiles. That global shortage has slowed vehicle production, creating a temporary spike in car prices. That’s a real challenge. And my administration is doing everything we can to address it. But again, these disruptions are temporary.
“Lumber prices are another example. They spiked early in our recovery, but in recent weeks, they’ve began to fall — they’ve fallen by more than 50 percent.”
Biden said economists detail transitory pricing effects such as increasing lumber costs to account for 60% of price increases this year.
“Now, I want to be clear: My administration understands that if we were to ever experience unchecked inflation over the long term that would pose real challenges to our economy,” he said. “So, while we’re confident that isn’t what we are seeing today, we’re going to remain vigilant about any response that is needed.”
Biden discussed conversations with Federal Reserve Chairman Jay Powell in which the two men shook hands on agreeing for the need to pass a bipartisan infrastructure bill.
“If we make a prudent, multi-year investments in better roads, bridges, transit systems, and high-speed Internet, and a modern, resilient electric grid, here’s what will happen: It breaks up the bottlenecks in our economy,” Biden said. “These steps will enhance our productivity — raising wages without raising prices. That won’t increase inflation. It will take the pressure off of inflation, give a boost to our workforce, which leads to lower prices in the years ahead. So, if your primary concern right now is inflation, you should be even more enthusiastic about this plan.”
The bipartisan infrastructure bill is set to be introduced in the Senate on Wednesday for an initial vote. However, Republicans publicly have said the bill will not have bipartisan support because the legislative text remains unfinished.
