The White House is worried about the toll of lofty oil prices on families and businesses, but is not worried that pricey fuel or wage growth will feed inflation, a top administration official said on Tuesday.
"I'm concerned about the burden it's going to have for all Americans, but I'm confident that the Federal Reserve will not allow it to have an inflationary impact on the economy," Allan Hubbard, a top economic advisor to US President George W. Bush and director of the National Economic Council, told Reuters.
New York oil prices broke to record highs on Tuesday above $70.85 a barrel on supply woes and rising tensions surrounding Iran's nuclear ambitions.
"We're very concerned about it, especially concerned for lower-income Americans and small business people. This is not part of their budget," Hubbard told Reuters after he spoke on economic matters at the Council on Foreign Relations.
Similarly, Hubbard played down the threat to inflation from rising wages.
"We're delighted that wages have started rising more rapidly," Hubbard said. "We're not concerned about it having an inflationary impact," he said, adding that this normal amid solid economic growth.
Wages have been rising moderately in recent months but were coming from a relatively low base. Wage growth has averaged 0.2 percent a month since November, Hubbard said, in part boosted by the fall in the unemployment rate down to 4.7 percent.
Headline inflation numbers, by both consumer and producer price measures, have also been inching up recently, coinciding with the resurgent oil price.
Comments
Comments are closed.