By the U.S. Chamber of Commerce
Historic Levels of Inflation Aren’t Going Away
Yesterday, we learned the price of consumer goods rose 0.3% last month and 8.3% in the last year.
Why it matters: Inflation is happening because too much money is chasing too few goods.
Be smart: While the Federal Reserve focuses on the demand side through raising rates to cool the economy, only the administration and Congress can address the policy sides affecting inflation – workforce, energy, and tariffs are three key places to start.
- Worker shortage: The U.S. economy has 11.5 million open jobs, but three million fewer workers than if labor force participation was equal to the pre-pandemic level. Getting people back to work and expanding legal immigration is key.
- Energy prices: Record-high gas prices are hurting businesses and families. We need additional U.S. energy production, but that requires investment that is possible only if the administration sends clear signals that they will support domestic production not just in the near-term, but over the medium term.
- Tariffs: The U.S. is imposing record levels of tariffs – which are just taxes. These distort markets and cost American families about $1,200 a year, according to the Congressional Budget Office. It is time to begin providing tariff relief to American families and businesses.
Bottom line: Congress and the President must focus on the solutions that only they can deliver.