President Biden’s top economic adviser said Friday that a spike in consumer prices reflects “choppiness” in the economic recovery, but it won’t likely result in long-term inflation.
“Those prices are increasing because we were at unusual lows because of the pandemic,” said Cecilia Rouse, chair of the White House Council of Economic Advisers. “We expect … there’s going to be some choppiness.”
The Consumer Price Index rose 4.2% for the 12 months ending in April, the Labor Department reported on Wednesday. April saw the steepest hike in prices since 2008.
Ms. Rouse said big factors in the price increases were the cost of used cars, partly due to a shortage of semiconductors for new cars, and a rebound of demand in the travel industry as the pandemic eases.
“At the moment, it looks as though people fully expect this inflation to be temporary,” she said. “They’re not the sort of structural factors that should lead to an inflation that the Federal Reserve cannot control.”
She said of the inflationary pressures, “There’s going to be this kind of misalignment. That’s what happens in economics.”