At the beginning of the year, she was promoted by Joe Biden. The Democratic President appointed Joelle Gamble Deputy Director of the National Economic Council. This Californian official is also Deputy Assistant to the President. From her position in the White House, Gamble became a very active spokesperson and advocate for Bidenomics. In an exclusive conversation with LPO, she played that role once again. She did so following the dissemination of data celebrated by the Democratic administration: the drop in the Consumer Price Index updated to October. Inflation increased by 3.2% during the last 12 months, including October, after the 3.7% recorded until September.
Thus, the United States showed the lowest annual rate since March 2021, according to what the Bureau of Labor Statistics published recently. In short, prices continue to rise, but they are doing so at a slower rate, not seen in the last two years. It was even colder inflation than predicted by many analysts.
What is your reading of the inflation data?
We saw that the consumer price index basically did not changed for the month, meaning that, on average, there wasn't much rise in prices. That's good. And it's part of a broader trend of falling inflation in the American economy while employment remains strong, which is the president's goal: Keeping people employed and in good jobs, and at the same time, making sure inflation is falling. As for the general trend, we have warned that pandemic-driven inflation has fallen 65% since last summer. And core inflation, which is a measure of inflation without volatile items like food and energy, is at it's lowest level in more than two years. Salaries are also higher than before the pandemic, when inflation is taken into account.
But despite this downward trend, real salaries - on average - are losing the race against inflation on average...
I would say a couple of things. First, effective average hourly pay, which is a genuine of real wages, increased in October and have increased over the past 12 months, so they increased by around 0.8%. And for about 80% of the workforce, who are blue-collar and non-managerial, it's as if their effective wages have actually increased even more than they did more than a month ago, and even more than they did in the last 12 months. Thus, workers on average have less impact on economy. This way, its impact on the economy decreases by reducing the number of people who actually need help at this time, especially in comparison with the pandemic. Thus, although there is still work to do, we noticed a really positive trend in the last year.
How did inflation especially affect Latino workers?
The president's goal is to make sure inflation is falling. And that wages are rising and that he is helping communities get paid jobs so that they can raise their families. That's his goal. And that's why he is doing things like taking on Big Pharma, because we know that prescription drug prices are too high. We know that insulin costs are too high. One of the laws he helped pass with Democrats in Congress, the Inflation Reduction Act, caps the price of insulin at $35. We know that energy bills are a big problem, which is why he is investing in energy sources that will help reduce energy costs in the long term. Those types of factors are the key focus for the President, cracking down on junk fees, overdraft fees, unnecessary fees that are charged when renting an apartment, all those types of things that just aren't fair. This is also a key purpose and is aimed at ruling out these types of implications for the communities' economy.
Instead of China, Mexico is the US's main trading partner. Is that fact a trend that is here to stay?
I can't know what will happen in the future, but I do know that we are dedicating a lot of time and energy to strengthening our relationship with Mexico, an important trading partner. And as we saw during the pandemic, global supply chains can be easily disrupted. Therefore, having business partners who are very close to home offers many important benefits and companies are recognizing this.
Can Biden's commitment to promoting the manufacturing industry and nearshoring really change the industrial and productive dynamics of the US?
Production has many benefits for the economy as an industry. It has what economists call a spillover effect, which implies that it is not only about the factories and industrial facilities themselves, not only about the factory plant, but also about the jobs that are created when the plant is installed, whether they are service jobs collaborating with the plant, whether they are smaller suppliers to that plant, or simply the income generated by the increase in activity and sales that reach that community. Therefore, multiple benefits are derived from manufacturing and its impact on productivity is greater than that of other industries. That is why the president is investing in manufacturing, because he knows how important it is for us to get the industries of the future. Semiconductors, clean energy technologies, medical and pharmaceutical products are part of what is key to fighting climate change. At the same time, they are important for creating jobs and keeping Americans safe.
Could nearshoring and agreements to replace value chains from Taiwan and China be an opportunity for Latin America?
Definitively. Nearshoring has benefits, as I mentioned in relation to Mexico. And we've noticed that there are often challenges in more complex supply chains and it can be difficult to get products from one part of the world or another. As you can see, supply chain risks are reduced by moving production from a single country to a variety of different countries, including Latin American countries.
Which result is the most important? And which is part of the deficit of Bidenomics?
The whole Bidenomics is working. We are seeing investments in America. We have seen a boom in factory construction. And as you mentioned, we are doing it with our partners and allies. We are spending a lot of time working to focus on supporting workers, supporting their right to organize, making sure they have pathways to gainful employment. This is seen in the employment figures we receive regularly, recording a record of job creation in recent years. You see it in the growing competitiveness and support for small businesses, where there is record growth in SMEs since the pandemic and, precisely, under this presidency that deploys a very solid agenda tu ensure that the playing field is level for guarantee fairness in competition between SMEs, industry and large "players".
The presidential elections will be held in exactly one year. What will be the rate of inflation then?
If I could be right with such predictions, I would be rich. But in practice, what we know is that there are really strong tailwinds behind the US economy heading into next year. Given the last inflation reports, we warn that inflation is cooling. Year over year, and over the last year, it is 3,2%, comparing that even to the numbers we were recording in 2022 - which had single and high digits, 9%, 7%, etcetera. So, we are doing very well!
Despite your optimism, Republicans choose to focus on criticism of the results of the economy. Why?
It may be part of the current politics, but the president has a plan, it is very clear, and we are aware that Republicans are simply criticizing the plan. The American people deserve to know which one is theirs.
Translator: Bibiana Ruiz.
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