White House National Economic Council Director Kevin Hassett said Americans’ concerns about inflation, borrowing costs and job security may be contributing to weak confidence even as consumer spending and business investment continue. He discussed the gap between economic activity and public sentiment in an interview with Stuart Varney on Fox Business’s “Varney & Co.”
The report described renewed energy-cost pressure as one factor complicating the inflation outlook. The Bureau of Labor Statistics said the Consumer Price Index rose 0.6% in September and was 3.7% higher than a year earlier. The index measures prices for a broad range of household goods and services, including gasoline, food and rent.
Hassett linked part of September’s inflation reading to attacks on energy infrastructure in the Middle East, while saying that prices in other areas appeared more stable. He characterized the headline result as disappointing but said he saw favorable details within the report. The supplied account did not identify which individual categories he considered favorable.
Mortgage rates are another concern for households, according to the report. Hassett said stronger income growth and easing inflation could eventually help affordability, but cautioned against drawing a firm conclusion from a single month of data. He said another month of information was needed before judging whether the Federal Reserve should act.
At the same time, Hassett pointed to capital spending, factory construction and consumer demand as signs of economic strength. He said bank executives had told him their customers were still making purchases rather than falling behind on payments. The account did not name the executives or provide figures on spending, investment or loan delinquencies.
Hassett said job-security worries can affect consumer confidence even when spending remains resilient. He described the contrast between economic indicators and people’s views of the economy as a question the White House was continuing to examine. He also forecast a strong holiday shopping season, arguing that consumer behavior could appear more positive than survey-based sentiment.
The comments reflect Hassett’s assessment of the economy; they do not establish that households broadly share the views conveyed by the bank executives he referenced. The report provided no survey results or additional data to measure public confidence or support the holiday-season prediction.
