US president Joe Biden has said the supply chain problems and price rises across the country are “temporary”.
In an update Biden said although the economy had come “roaring back” there had been some price increases.
“Some folks have raised worries that this could be a sign of persistent inflation,” he said. “But that’s not our view. Our experts believe, and the data shows, that most of the price increases we’ve seen are expected to be temporary.”
Biden acknowledged issues with global supply chains had affected US industry, saying it was unrealistic for this not to happen when you “flip the global economic light back on”.
“As demand returns, there’s going to be global supply chain challenges,” he said.
“We’ve seen that in semiconductors, which are used in automobiles. That global shortage has slowed vehicle production, creating a temporary spike in car prices. That’s a real challenge. And my administration is doing everything we can to address it. But again, these disruptions are temporary.”
Biden said lumber prices, which had spiked earlier, had fallen by more than 50% in recent weeks, while prices in the hospitality industry were returning to where they used to be.
“Economists call all of these things transitory effects,” said Biden. “And they account for about 60% of the price increases we’ve seen over the last few months.”
The president said unchecked inflation over the long term would pose challenges to the economy, and although this was not happening, the administration would remain vigilant.
Biden said the US economy had experienced the highest economic growth in 40 years since he took over six months ago, and growth projections were stronger than before the pandemic.
The president emphasised the importance of planned investments in road, bridges, transit systems, high-speed internet and the electric grid, to reduce bottlenecks in the economy.
Earlier this month, Biden issued a major executive order promoting fair and open competition.
The World Shipping Council responded that only normalised demand, and not regulation, would solve supply chain delays.
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