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Inflation is the No. 1 challenge facing families right now, Rouse says

RACHEL MARTIN, HOST:

I know you're feeling it. How could you not? The national average for a gallon of gasoline has now topped $4.50. In California, prices are now over $6 a gallon. And don't even get me started on my own grocery bill right now. The prices of all the goods and services that Americans need to make life work are skyrocketing. We went out and talked with some shoppers in California.

UNIDENTIFIED PERSON #1: I work two jobs. So I'm a bartender at night, and I'm a cashier in the morning. So traveling to one to the other, then going back home - it's been probably the biggest thing for me that I feel the most, especially with gas being at $6 on average.

RAMONA SHULL: At one point, you know, it's just - you have to say, are you going to get groceries to eat or are you going to drive your car or are you going to pay this bill or are you going to call them and say, look, I'm having a hard time right now?

UNIDENTIFIED PERSON #2: But I'm looking at this right now, this beef keto salad (ph). I just wanted to see, was it the price that I mistaked (ph) it for? I thought that was a mistake, the $7.99. This used to cost $3 and $4 just last year. It has literally doubled in price.

UNIDENTIFIED PERSON #3: So you make necessary adjustments. You more strategic in where you go, when you go, how you go and what you're going for. You kind of say, OK, I'm going to go here, here, here, and that's it. And you go there, and you don't deviate from that plan because it costs you in gas and so forth.

UNIDENTIFIED PERSON #4: At the moment, we're just trying to see how much water we can get. Luckily, my grandma has a Safeway card, so we can get, like, two things of water for $7, especially since it's really hot now.

SHULL: I thank God my kids are grown - 41 and 27 - and that my grandkids are in other states because I can only take care of me now. It's like, you either do or you don't. It's either, you know, you don't - it's a total sacrifice right now.

MARTIN: The voice of Ramona Shull (ph) from Oakland, Calif. Also from Oakland, we heard from Sin Pan (ph) Gregory Cartwright (ph), Larry Sullivan (ph), and Christian Otiano (ph) in Los Angeles. The people here in Washington, D.C., tasked with doing something about crippling prices are the White House's Council of Economic Advisers. Cecilia Rouse is the chair, and she joins us now. Thank you so much for making the time to talk with us.

CECILIA ROUSE: It's a pleasure to join you today.

MARTIN: So, Cecilia, prices go up. People don't want to buy as much. Retail takes a hit. So does the stock market. People have to choose between filling up their tank and buying groceries. Does the Biden administration recognize this as a crisis at this point?

ROUSE: Absolutely. The president - his entire administration understands that inflation is the No. 1 challenge facing families right now. In many ways, we have a tale of two economies. We know that we've got very low unemployment. We've had record job growth. We've made a very strong recovery over the past year due to the support that the federal government gave, beginning with the CARES Act, through the American Rescue Plan to households and family - you know, families and businesses, through the actions of the Federal Reserve Board. And that got us through the pandemic, which we are still in the middle of. But we also know that with that supportive demand, we had supply chains that crumbled, and that mismatch has generated inflation. I would like to clarify that, first and foremost, addressing inflation is the purview of the Federal Reserve Board. And Jay Powell - Chair Powell has said that they are on it, that they're focused, that they are - that they understand, that they're addressing it. This does not mean that this president is not also focused on it. And we can talk about the many steps he's trying to take as well.

MARTIN: I completely understand that this is mainly in the purview of the Fed, but the White House says it has some levers to pull. And the White House is also going to get the blame for a lot of this, politically speaking. So what are the solutions?

ROUSE: Well, importantly, the president, you know, politics aside, understands the impact this has on families. So what has he done? So first, in addressing gasoline prices, he - you know, the president has led the world in trying to coordinate the largest release of oil reserves in history. We have produced more oil domestically in this last year, the president's first year in office, than President Trump did, for example, in his first year. So we are pushing. You know, we are trying to produce more oil, encouraging oil producers to use the leases that they have that they're not using. We also are working to produce more homegrown biofuels in the short term. And so that will help relieve the need for the fossil fuels. And we are trying to - you know, to speed the pivot to clean energy in our future, but we understand that takes time.

Some of the prices that you're - that you cited were in food as well. And so the president is working there to, for example, help our American farmers grow more crops through double cropping, trying to lower their input costs because we understand fertilizers, which also rely on energy, are also high. He's also looking to increase costs that we know that families have. For example, through the bipartisan infrastructure law, he's taking steps to reduce the cost of high-speed internet for about 50 million Americans.

Finally, he's working to improve supply chains so that we get to - so that we get, you know, goods more cheaply to stores so that stores aren't passing on those prices to consumers. And finally, you know, when we have deficits, that also helps to cool down an economy. And this week, we learned that reduced - that deficits were lower this year by $1.5 trillion compared to any time last year, and that will also help to reduce prices.

MARTIN: Let me ask - Treasury Secretary Janet Yellen says higher food and energy prices together could cause stagflation globally. For those of us who don't necessarily remember the '70s, stagflation is slow economic growth and high inflation at the same time. Are we headed there?

ROUSE: Well, look, this is, again, primarily the purview of the Federal Reserve Board, and we certainly hope not. We hope that the Fed is able to achieve its dual mandate of price stability - so that would be lower inflation - and also full employment. We have a strong labor market, and we came in with some - we came in with very strong growth at the end of 2021. So they've got some room to maneuver without us having, you know, a big slowdown in our economy and largely stagflation. But it is a difficult task that lies ahead.

MARTIN: A new NBC poll says only 33% of Americans approve of the president's handling of the economy. Only 23% approve of his handling of inflation and the cost of living. The solutions that you outlined earlier, as you admit, are longer term. What is the president going to do to make sure that Americans can feed their family and drive to work in the short term?

ROUSE: Well, we certainly want to - you know, people need to be able to feed their families and drive to work. There's no question about that. And the president - we have had - you know, we've been supporting energy costs through LIHEAP. And, you know, the American Rescue Plan generated a lot of support for families and households so that they start this time with healthier balance sheets. So we understand that this is important, and the president is doing what he can to lower those costs in the short term. And we really look forward to seeing prices come down and have stable unemployment as well.

MARTIN: Cecilia Rouse, chair of the Council of Economic Advisers, thank you.

ROUSE: Thank you. Transcript provided by NPR, Copyright NPR.