(Bloomberg) -- President Joe Biden took credit for easing supply-chain pressures and lowering inflation ahead of the holiday shopping season, while acknowledging he must do more to help US consumers battered by high prices.
“We know the prices are still too high for too many things, that times are still too tough for too many families,” Biden said Monday at the White House. “We’ve made progress, but we have more work to do.”
Biden accused companies of keeping prices for consumer goods artificially high, even as supply-chain problems receded.
“Let me be clear to any corporation that has not brought their prices back down, even as inflation has come down, even as supply chains have been rebuilt — it’s time to stop the price gouging,” Biden said.
Central to Biden’s effort is a new White House Council on Supply Chain Resilience, a Cabinet-level body Biden launched Monday. The council will conduct a quadrennial supply chain review, mirroring similar strategic documents prepared for national defense and homeland security. The first review is due at the end of 2024.
“I’m charging this group to ensure that our supply chains remain diversified, resilient, and into the future,” Biden said.
Biden’s comments came on Cyber Monday, with this year’s holiday season shaping up to be a test of American consumer power as pandemic-era savings dwindle and interest rates remain at a two-decade high.
US shoppers will spend as much as $12.4 billion online during Cyber Monday, according to Adobe Inc., which adjusted its initial $12 billion forecast up on stronger-than-expected Black Friday spending. Still, some shoppers are embracing buy-now-pay-later features that allow them to stretch their budgets.
Earlier: Cyber Monday Forecast Boosted After Record Holiday Sales
High inflation has been a major factor driving voter disapproval of Biden’s handling of the economy, polls show, a perception that threatens to torpedo his reelection bid next year.
“We made progress, you know, from turkey to air travel to a tank of gas, costs went down,” Biden said Monday. “As a share of earnings, this Thanksgiving dinner was the fourth cheapest ever on record.”
Supply chain pressures following the pandemic accounted for 60% of the surge in US inflation, according to a Federal Reserve Bank of San Francisco analysis. The White House has been eager to tout that explanation because it puts the pandemic — not the government’s fiscal stimulus in response — as the primary driver of higher prices.
“We’re pleased with the progress on supply chains that was showing up in lower prices for everything from turkeys to gas prices for families this Thanksgiving, but we’re determined to keep working,” White House Economic Adviser Lael Brainard told reporters ahead of Biden’s supply chain announcements.
As part of the steps unveiled Monday, Biden is invoking the Defense Production Act to invest $35 million in starting materials for sterile injectable medicines. The Department of Defense is also planning a report on the pharmaceutical supply chain and US reliance on high-risk foreign suppliers.
The existing Freight Logistics Optimization Works program, a public-private information-sharing agreement that allows major shippers to see real-time logistics data to better predict bottlenecks, will have new participants and add containerized shipments of agricultural products.
The Energy Department also announced almost $300 million in grants to coal communities to convert to what it calls “clean energy supply chains.”
Moody’s Analytics economist Jesse Rogers on Monday called Biden’s announcements “a step in the right direction.”
“While unlikely to resolve some of the more complex issues plaguing supply chains in one go, measures targeting pharmaceuticals, climate infrastructure, data security, and logistics will bolster resilience and get the ball rolling on smart infrastructure and global cooperation,” Rogers said.
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