Experts Fact-Check 4 Statements Karine Jean-Pierre Made About Inflation

This election year, inflation is top of mind for many voters. Yet, it continues to be stubborn, as the hotter-than-expected Consumer Price Index (CPI) data — released April 10 — showed that inflation increased even more than experts had anticipated in March, standing at 3.5%, following a 3.2% increase in February. This is still a way off from the Federal Reserve’s 2% target.

The administration has been addressing the issue constantly, trying to reassure consumers that the “economy is going in the right direction.”

Commenting on today’s CPI, President Joe Biden said: “Today’s report shows inflation has fallen more than 60% from its peak, but we have more to do to lower costs for hardworking families. Prices are still too high for housing and groceries, even as prices for key household items like milk and eggs are lower than a year ago,” according to a statement on the White House website.

Here are some other statements in 2024 so far from Press Secretary Karine Jean-Pierre and other administration officials about inflation, and what experts have to say about them.

Asked recently by a reporter at the daily press conference whether the White House is blaming shrinkflation and inflation solely on companies, “or do his [Biden’s] policies play any role in that?” Jean-Pierre responded:

“The President has called on companies to stop, you know, taking advantage of Americans. He’s been very clear about that. He’s repeatedly called on large corporations, more specifically, to pass along their savings on to their customers. We’ve said that. We’ve been very consistent about that.  And that includes rip-offs such as shrinkflation.”

Michael Micheletti, chief communications officer at Unlock Technologies, said that “This is a bit of a ‘chicken or the egg’ dilemma.”

He continued, “Companies are trying to keep costs as level as possible for consumers, not looking to really jack up the costs. I think this is just wordsmithing and communication gymnastics.”

According to Micheletti, certain policies and other high-level White House decisions have influenced inflation.

“One example would be the draining of the Strategic Petroleum Reserve to artificially keep gas prices low,” he said. “This is not sustainable.”

At a daily press conference in March, Jean-Pierre reiterated what Treasury Secretary Janet Yellen had recently said: “Inflation is down two-thirds from its peak, and the trend is clearly favorable.”

Jean-Pierre noted that Yellen expects it to continue to decline with a strong market and economy. She then added, according to a White House transcript:

“And I also want to remind you what caused inflation. We know that inflation was caused by supply chains that broke down because of the pandemic. Russia’s war in Ukraine — we know that caused oil prices to skyrocket. Our economy was disrupted by so many ways because of the pandemic.  That’s what caused inflation.”

Jason Sorens, senior economist at the American Institute for Economic Research, confirmed that “inflation is indeed down two-third from its peak.”

Now in terms of what caused it, according to Sorens, both supply chain problems as well as fiscal and monetary stimulus are the culprits.

“Evidence suggests that the inflation we’re seeing now is mainly supply-driven, but most of the inflation in late 2021 and 2022 was demand-driven,” he said. “Even if most of the inflation is supply-driven, the Fed’s inflation target implies that it needs to counteract supply-driven inflation with contractionary policy.”

To put this in context, inflation stands at 3.5%, while it stood at 5% in March 2023, 8.5% in March 2022, before reaching a 9.1% high in June 2022, according to Bureau of Labor Statistics (BLS) data.

“This week, we saw more evidence that our economy is strong and inflation is falling under President Biden,” Jean-Pierre posted on X on Jan 27. While this was technically accurate in January, today’s CPI data shows that inflation is reversing its downward trend.

According to Vijay Marolia, co-founder of The Cash Square, the press secretary was missing the point.

“Just because the rate of inflation is coming down, it doesn’t mean that prices are doing the same,” he said. “Said differently, a lower and decreasing inflation rate still translates into a higher cost of living for most Americans.”

He also noted that while economists use CPI data to gauge inflation, the calculations  have changed over a dozen times in just his lifetime. “If we had continued using the same measures of inflation as we did in 1980, it would be closer to double-digits.”

Micheletti added that while the economy is strong, the devil is in the details on how you interpret the data. “For example, unemployment remains low, BUT more Americans are working two jobs to make ends meet,” he stated.

Asked about the potential economic effects of this “sort of mass-level forgiveness” of student debt and whether the administration has any concern that it could be inflationary, Jean-Pierre said in April:

“On the question of economic impact, you know, we have some CEA [Council of Economic Advisers] analysis that’s coming that we can follow up with you on around the plan. I would say, generally, we know that student debt relief leads to economic mobility. We know it leads to people contributing to the economy, being in a better position to be able to, for example, take out mortgages to buy homes and loans to start businesses. We’re not concerned about an inflationary effect based on the analysis the CEA has done.”

According to Michael Collins, founder and CEO of WinCap Financial, the statement is partially true.

“While student debt relief can lead to economic mobility and provide individuals with more financial freedom to participate in the economy, there are concerns that it could also have inflationary effects,” he argued.

This is because forgiving large amounts of debt would essentially inject a significant amount of money into the economy, potentially leading to an increase in prices, he explained.

“Additionally, if lenders anticipate loan forgiveness in the future, they may be more willing to lend, which could also contribute to inflation,” he said. “The impact of student debt forgiveness on inflation is a complex issue and would likely vary depending on the amount of debt forgiven and other economic factors.”