On Thursday’s broadcast of “CNN News Central,” White House Council of Economic Advisers Chair Jared Bernstein stated that personal spending growing higher than personal income isn’t due to inflation, it’s due to the “strong labor market.” And that real wage growth is due to the labor market combined “with consistently easing inflation.” And “As real wages grow, consumers are able to go out there into the market and get what they want and what they need.
Co-host Brianna Keilar asked, “[W]ith these new numbers showing personal spending growing at a much higher rate than personal income, what do you attribute that [to]? Is that inflation? Do you attribute that directly to inflation?” Bernstein responded, “No. In fact, I attribute that to the strong labor market. We have a very strong labor market, as you well know, unemployment below 4% for a year and a half, and now we’re seeing real wage gains. Again, this is the interaction of that labor market I just described with consistently easing inflation. As real wages grow, consumers are able to go out there into the market and get what they want and what they need. Now, we’re an almost 70% consumer spending economy.