Midterm elections are next week and heading into the polls the economy is on the mind of many in rural America.
Jared Bernstein is on the White House Council of Economic Advisors. The issues facing the U.S. economy that rural Americans are concerned with, he says, are global issues.
“In fact, inflation is considerably higher in Europe than it is here. And I say that not because it means we can just sit on our hands, we’ve got to do everything we can to ease those prices. And I do think people should know that this is happening everywhere. Why is it happening everywhere? Well, one reason is because when the pandemic hit global supply chains, the trade routes that are so important to particularly many farmers in rural America to get their goods to market and out into international waters, they got completely jammed up.”
The good news, Bernstein says, is the supply chains are quickly becoming unsnarled. While it’s not back to normal, supply chain issues are 75 percent lower from their recent peak.
Another concern of rural voters is fuel prices.
“If you look at where prices were in mid-June, over $5 a gallon, listen, we got to do more work to keep those down. But I think what happened in March when the President released 180 million barrels of oil from strategic reserves, that made a real difference. We started seeing that price decline down from north of five to South $4 a gallon. That helped farmers also by the way, as they know well, in terms of fertilizer costs, because petroleum is an inputs are fertilizer products in particular.”
Further, food inflation is another issue.
“Food inflation should fall very significantly this year. And that’s certainly every forecast I’ve seen is pointing in that direction. But again, we can’t sit on our hands. We have to do everything we can to help. I’m not crossing my fingers and hoping the forecasts are right, I’m advising the President, as is our team, to do all we can to help. Look, I think the key thing here is to remember something the President says in this context, which is don’t compare me to the Almighty, compare me to the alternative. We’ve done a lot and we want to do a lot more to ease these price pressures. We don’t see any such plans from our opposition. And so, we think it’s very important to steady as she goes, keep trying to do what we need to do to ease these pressures.”
Bernstein adds other economic indicators look strong.
“GDP of course, gross domestic product, that’s the broadest measure of economic growth and it came in strong in the third quarter. Part of that, or actually a lot of it, had to do with strong exports. And again, I assign that to some of the unsnarling of the supply chain. Our exporters, and again, many of those are agricultural goods, a lot of that is oil too, by the way. We are the number one producer when it comes to crude oil as well as natural gas. Those exports are finding their way into global markets. So, I would consider that to be an important indicator. And then, this Friday, we’re going to get a jobs report. We want to look at that carefully because as we’ve mentioned the job market is as strong as it’s been in over 50 years. We want to maintain that strength, while taking down these price pressures.”