New economic indicators

MATT: NEW ECONOMIC INDICATORS OUT THIS WEEKEND. THE COMMERCE DEPARTMENT REPORTED FRIDAY CONSUMER SPENDING ROSE BY POINT-ONE% IN JULY MARKING A SLOWDOWN FROM JUNE. AMERICANS SPENDING LESS ON CERTAIN GOODS LIKE GAS, AS THEY CONTINUE TO FACE NEAR RECORD HIGH INFLATION AND RISING INTEREST RATES. DON GRAVES IS DEPUTY COMMERCE SECRETARY IN THE BIDEN ADMINISTRATION. HE JOINS US FROM WASHINGTON. DON, WELCOME TO THE SHOW. >> SO GOOD TO BE WITH YOU. MATT: LET’S START WITH FRIDAY NUMBERS. WHAT ARE YOUR TAKEAWAYS IN THE WORLD OF COMMERCE AS YOU LOOK AT THESE INDICATORS? >> NUMBERS SUGGEST THAT THE ECONOMY IS ACTUALLY IN A GOOD PLACE. WE ARE PLEASANTLY SURPRISED AND PLEASED BY THE NUMBERS THAT HAVE BEEN SHOWN. THE ECONOMY IS CONTINUING TO ACCELERATE, AND WE SEEN GOOD GROWTH IN CONSUMER SPENDING, ADJUSTED FOR INFLATION, GREW BY 2.5%. PERSONAL INCOME, ADJUSTED FOR INFLATION, GREW AT 5%. IT IS EXACTLY WHAT WE ARE GOING TO SEE TO SHOW THAT THE FEARS THAT FOLKS HAD OVER THE LAST COUPLE OF MONTHS ABOUT A RECESSION HAVE BEEN LARGELY ERASED. INFLATION IS COMING DOWN, AND IT IS STILL A PROBLEM FOR PEOPLE, BUT IT IS MODERATED. THAT IS A GOOD THING. MATT: IN A MUCH ANTICIPATED SPEECH, THE FED CHAIR SAID THAT BRINGING DOWN INFLATION WILL REQUIRE ECONOMIC PAIN. YOUR WORLD OF COMMERCE, WHAT DOES THAT MEAN, DO YOU THINK? >> LARGELY, WE HAVE ALREADY SEEN THAT AND GAS PRICES AND FOOD PRICES. YEAR-OVER-YEAR, THEY ARE UP SIGNIFICANTLY. WE ARE STARTING TO SEE THAT. THAT IS GOOD THING. THE KEY FOR US IS TO MAKE SURE WE DO THIS SO WE DON’T HURT DEMAND OR KEEP DEMAND UP AND INCREASE THE AMOUNT OF SURPRISE — SUPPLIES. MATT: THE PRESIDENT’S PLAN RECEIVED A LOT OF REACTION TO THE WEEKEND AND HOW THIS WILL IMPACT THE BROADER ECONOMY. DO YOU HAVE ANY CONCERNS FROM COMMERCE THAT THIS COULD ACTUALLY WORSEN INFLATION? >> THE AMOUNT OF STUDENT DEBT CANCELLATION AND CHANGES TO OUR LOAN SYSTEM, THEY ARE A BLIP IN THE OVERALL ECONOMY. WHAT WE ARE TALKING ABOUT IS HAVING REAL IMPACT IN BORROWERS LIVES, AND THE TYPES OF BORROWERS WHO HAVE THE BIGGEST CHALLENGES ARE THOSE WHO ARE NOT MAKING MORE THAN $125. THESE ARE PEOPLE WHO ARE LARGELY MAKING $75,000 OR LESS. THEY DON’T SEE THE BENEFITS. THAT WILL IMPROVE LIVES BECAUSE THEY ARE THE ONES BEARING THE LARGE BURDEN AS A RESULT OF THE INFLATIONARY PRESSURES. THAT INCLUDES THE LIVES OF AMERICANS ALL ACROSS THE COUNTRY WHO NEED THIS TYPE OF DEBT RELIEF, AND IT WILL NOT CAUSE MAJOR ISSUES, RELATIVE TO INFLATION. MATT: LET ME ASK YOU ABOUT THE CHIPS ACT. THEY ARE GOING TO BOOST CHIPMAKING. HOW FAST CAN WE SEE THE IMPACT, AND WHAT WILL THAT IMPACT? >> THAT HAS TO DO WITH THE ECOSYSTEM. AND WHAT WE EXPECT TO SEE IS THE COMMITMENTS THEY HAVE MADE, WHICH WERE POTENTIALLY JUST TEMPORARY, THEY ARE GOING TO BE PERMANENT. INVESTMENTS BY INTEL AND OTHERS ARE GOING TO LEAD TO TENS OF THOUSANDS OF NEW JOBS THROUGHOUT THE MIDWEST. >> INTEL LOOKED AT WISCONSIN FOR THAT NEW PLANT THEY ARE NO BUILDING IN OHIO. WE THINK WE WILL SEE MORE DEVELOPMENTS LIKE THAT IN THE COMING YEARS? >> THIS IS GOING TO PUT THE U.S. BACK IN THE CENTER OF THE SEMICONDUCTOR MAP. COMPANIES LIKE INTEL, LARGE COMPANIES FROM ABROAD, THEY ARE GOING TO BE LOOKING AT THE MIDWEST AND MAKING BIG THAT’S BECAUSE THEY NOT ONLY HAVE THE WORKFORCE AND THE TALENT THAT IS NEEDING — NEEDED, BUT TRANSPORTATION LOGISTICS AND COMPONENTS AS WELL AS THE ECOSYSTEM I WAS MENTIONING, SO A SMALL AND MIDSIZE TOOL COMPANY, AND MAKERS, THAT IS ALL THE RIGHT MIX OF INGREDIENTS OR SEMICONDUCTORS AND WHAT NEEDS TO BE SUCCESSFUL IN THE LONG RUN. MATT: DON GRAVES. THANK YOU FOR YOUR TIME AND PERSPECTIVE. >> THANK YOU. MATT: UP NEXT, A SIGN OF THE TIMES.

New economic indicators

U.S. Deputy Commerce Secretary Don Graves on inflation

Updated: 9:30 AM CDT Aug 28, 2022

U.S. Deputy Commerce Secretary Don Graves on inflation

U.S. Deputy Commerce Secretary Don Graves on inflation