Rep. Kevin Brady, R-Texas, told Newsmax Friday that the economy is “spiraling” down to a “significant recession.”
“We’re struggling here in major ways. Inflation is accelerating. As you know, small business optimism is plummeting,” Brady said during “The Chris Salcedo Show” Friday. “We learned today we are in a wage-price spiral, which ultimately will end up in recession, really crushing families and small businesses.”
While the Bureau of Labor Statistics reported Friday that nonfarm payrolls increased by 428,000 in April, the new jobs, mainly in the hospitality and leisure industry, did not impact the unemployment rate, which remains at 3.6%, or about 5.9 million people.
“If you look closely, what you saw is that we already have a worker crisis,” he said. “It’s driving inflation in a big way, but America lost 353,000 workers last month; our workforce actually shrunk in America at a time where we need [workers] to assemble products, deliver them, man the production lines, and service this equipment and these products.
“My belief is that we are headed toward a recession. A significant one, and I worry every day that prices are going up three times faster than wages are.”
While new jobs were created, CNBC reported Thursday that the production output of the workforce dropped 7.5% from January through March, marking the fastest decline since the third quarter in 1947.
As worker production decreased, labor costs increased 11.6%, logging the biggest gain since 1982, serving as an indicator of higher inflation and rising prices.
In addition, the Federal Reserve announced Wednesday that it was raising interest rates by a 0.5 percentage point, the largest increase since 2000, the news outlet reported.
“Inflation is much too high, and we understand the hardship it is causing. We’re moving expeditiously to bring it back down,” Fed Chairman Jerome Powell said during a news conference Wednesday.
Powell said the central bank is “strongly committed to restoring price stability.”
Powell said the organization is not contemplating future increases of more than 0.5 percentage points at a time, which some have called for to bring inflation down.
“The American economy is very strong and well-positioned to handle tighter monetary policy,” he said.
Powell said the moves the Fed is making should bring a “softish” landing to the more than 40-year inflationary high.
“We’re going to have a lot of rebuilding to do over President Biden,” Brady said.
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