President Donald Trump's top economic adviser, Kevin Hassett, made a controversial claim on Fox News Sunday, suggesting that rising consumer spending is a sign of public optimism despite ongoing affordability struggles. Hassett, director of the National Economic Council, said that people are spending more on gas, groceries, and restaurants, which he interprets as optimism about the future.
Economist Calls Comments Detached from Reality
David L. Ortega, a food economist at Michigan State University, strongly disagreed, stating that such remarks are deeply misleading. He explained that spending on necessities like food and gas is driven by higher prices, not optimism. Food prices are 3.2% higher than a year ago and over 30% higher than before the COVID-19 pandemic, with the sharpest increase in 2022 since 1979.
Impact of Trump Policies
Ortega attributed recent price spikes to Trump administration policies, including tariffs, trade policy, and immigration enforcement, which affect labor and transportation costs. Global uncertainty from the Middle East conflict also contributes to higher gas and food prices.
The Consumer Sentiment Index recently hit its lowest level ever recorded, contradicting Hassett's optimism narrative. Ortega warned that such disconnects erode public trust in officials and institutions, hindering economic policy.
Practical Advice for Consumers
Ortega advised shoppers to compare prices, use store brands, and substitute expensive items. Non-food shoppers can use price-monitoring tools and cash-back extensions. He also recommended mindful gas consumption and watching for hidden fees. However, he emphasized that systemic solutions require political accountability, urging voters to hold elected officials responsible in upcoming elections.
