The White House maintained on Monday that Americans are well equipped to deal with current economic hurdles – including US stocks plunging into a bear market – because of President Joe Biden’s efforts in office.
When asked the White House’s reaction to the falling stock market, including all the gains made since Biden took office last year being wiped out, press secretary Karine Jean-Pierre said the White House is watching the situation closely.
“We know families are concerned about inflation and the stock market. That is something that the President is really aware of,” she said during Monday’s press briefing, adding that the US is “not the only country dealing with what we’re seeing at the moment as it relates to inflation.”
The press secretary went on to blame the ongoing war in Ukraine and inflation caused by the world’s emergence from pandemic lockdowns as factors playing into the current state of the economy.
But Jean-Pierre argued that despite the stock market’s drop, and a host of other troubling economic indicators, it’s the White House’s view that Americans are in better shape to deal with economic problems than before Biden took office.
“The way that we see this is the American people are well positioned to face these challenges because of the economic, historic gains that we have made … under this President in the last 16 months,” she continued.
The unemployment rate remains at 3.6% – slightly higher than the half-century low recorded in February 2020, but Americans’ wallets are getting pummeled by the rising cost of goods and diminishing stock values.
The average nationwide price for a gallon of regular gas recently hit $5 for the first time ever, according to AAA. Consumer confidence hit a record low, data released last week showed. And on Friday, a miserable Consumer Price Index report showed US inflation was significantly higher than economists had expected last month, spurring Monday’s stock market shifts.
US stocks on Monday plunged into a bear market as investors grew increasingly nervous about the prospect of even harsher rate increases from the Federal Reserve, which are meant to take some of the sting out of inflation.
After raising rates by a half point in May — an action the Fed hadn’t taken since 2000 — Chair Jerome Powell pledged more of the same until the central bank was satisfied that inflation was under control. At that point, the Fed would resume standard quarter-point hikes, he said.
But after May’s hotter-than-expected inflation report, Wall Street is increasingly calling for tougher action from the Fed to keep prices under control.
Pressed on the effect prospective retirees may be feeling as a result of the plunges to in the value of their 401k, Jean-Pierre said, “We know that high prices are having a real effect on peoples’ lives. We get that, and we are incredibly focused on doing everything that we can to make sure that the economy is working for the American people. But we are coming out of the strongest jobs market in American history, and that matters. And a lot of that is thanks to the American Rescue Plan.”
She also pushed back on the notion that the American Rescue Plan, a massive Covid-19 relief bill, signed into law last year has led to historic inflation, even though government spending is known to boost inflation. The rescue plan has been cited by critics as one of many factors contributing to the current state of the economy.
Treasury Secretary Janet Yellen said earlier this month that Biden’s hallmark $1.9 trillion plan, which included stimulus checks, enhanced unemployment benefits and various other forms of relief contributed only modestly to inflation.
Yellen downplayed the inflationary impact of the stimulus package, pointing instead to the economy’s “miraculously rapid recovery.”
Later in Monday’s press briefing, Jean-Pierre also said gas prices “would have been even worse” had Biden not taken action to address anticipated oil supply shocks. The President authorized a record release from the country’s oil reserves earlier this year, but prices have only grown since then.
The White House is in the midst of a month-long effort to signal focus on the economy and inflation. But earlier this month, the President acknowledged that there is little more he can do to lower the cost of gasoline or food in the immediate term.
“There’s a lot going on right now but the idea we’re going to be able to click a switch, bring down the cost of gasoline, is not likely in the near term. Nor is it with regard to food,” Biden said at the White House.
CNN’s David Goldman and Chris Isidore contributed to this report.
