The U.S. economy is showing “continued resilience” despite a predictable slowdown, a top White House economic adviser said on Wednesday.
National Economic Council director Brian Deese said low credit card delinquency rates and mortgage problems indicate resilience in household balance sheets, while the labor market and savings rate also indicate more stable growth. He also pointed to slowing inflation as a positive sign of healthier economic growth.
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“We need to see a transition to a more stable growth path, but I think if you look at the key things you need in that framework, some loosening on the inflation side…we’re starting to see some evidence in in this direction,” Deese said on CNBC’s “Squawk Box” on Wednesday.
The November labor market report released on Friday showed employment growth was better than expected, with nonfarm payrolls rising by 263,000. The unemployment rate was 3.7%.
White House economic adviser Brian Deese speaks during a press briefing at the White House in Washington, March 31, 2022.
Kevin Lamarque | Reuters
The Federal Reserve has steadily raised interest rates in a bid to bring down inflation to the highest level in 40 years, contributing to worries about a coming recession. The improving labor market, combined with a 0.6% increase in the average hourly wage last month, put pressure on the Fed to continue raising rates.
The Fed’s benchmark overnight borrowing rate hit a target range of 3.75% to 4% after six consecutive increases this year. Major US equity indices have struggled this week, in part due to fears of a slowing economy and expectations of further rate hikes to come.
The Fed is expected to raise interest rates again at its meeting next week.
Despite investor concerns, economic resilience will position the United States to become a center of “investment, productivity and innovation” in the coming years, Deese said.
“We were in (Phoenix, Arizona) yesterday with an array of CEOs who all pointed to this, that even as we look at this transition and navigate through this historically unique transition, the United States looks better as an investment prospect, and it will be a pilot,” Deese said. “That’s where we’ll get our innovation and production capacity, beyond the next month or two.”