President Joe Biden dismissed concerns that the United States will experience persistent inflation as the economy emerges from the pandemic, while warning that restaurants and others in the hospitality industry may take longer to recover.
“There will be short-term inflation,” as the economy picks up, Biden said Wednesday night at a CNN town hall in Cincinnati. But most economists believe that “it is highly unlikely that long-term inflation will get out of hand,” he said.
He then told a restaurant group owner who cited hiring issues that “your business” and others in the hospitality and tourism industries could be “at a stalemate for a while”, partly because workers in the sectors seek better wages and working conditions.
“It’s really a question of people now deciding that they have the option of doing other things,” he said. “People are looking to make more money and to negotiate.”
Inflation has become a political handicap for the White House in recent weeks. The United States saw the biggest increase in consumer prices in more than 12 years last month, with a Department of Labor gauge up 5.4% from a year ago.
“Inflation is driving up the cost of everything,” Kentucky Senatorial Minority Leader Mitch McConnell said at a press conference on Wednesday opposing Democratic calls for Biden’s long-term social spending plan.
Much of recent inflation has been linked to areas of the economy experiencing parts shortages or increased demand as a result of the reopening, including cars, hotels and lumber – a point that Biden pointed out and reiterated on Wednesday.
“It’s rational, when you think about it. The cost of an automobile is kind of back to what it was before the pandemic, ”Biden said. Auto prices have been behind much of the rally in headline inflation, but are actually considerably higher than they were before the pandemic.
Republicans have also blamed Biden and Democrats for labor shortages at restaurants and other low-wage businesses, alleging that unemployment benefits made more generous by the rounds of pandemic relief measures discourage workers. Americans to return to work. Biden said those companies should offer higher wages in response, calling the wage hike a “feature” of his economic plans.
Job vacancies have reached an all time high even as unemployment remains high. In the hotel and restaurant industries, the number of job vacancies stood at 1.25 million in May, up from 807,000 in February 2020.
“A lot of people who now work as waiters and waitresses decided they didn’t want to do this anymore,” Biden said.
His remarks at mayor come at a key moment in the debate over his $ 4 trillion economic program. Republicans on Wednesday blocked debate over a $ 579 billion bipartisan infrastructure package championed by Biden. Senators working on the details of the package say they are close to a final deal, and leading Republicans have said they will be ready to vote on the bill as early as Monday.
Democrats are also proposing a $ 3.5 trillion plan that contains many of the president’s social spending priorities.
Republicans are looking to make rising consumer prices a cornerstone of their case against Biden and his management of the economy. They warn that its long-term social spending and taxes on the rich will cause inflation to run out of control.
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