Lael Brainard slams food companies for ‘shrinking inflation’ as White House attacks price gouging

National Economic Council Director Lael Brainard on Tuesday blamed higher consumer prices on “shrinking inflation,” doubling down on the latest battlefront of President Joe Biden’s corporate lobbying campaign.

“If you look at some of the staples, like eggs or milk, they’ve gone down. But consumer brands, instead of actually lowering prices, have shrunk packaging,” Brainard said on CNBC’s “Money Movers.” “That’s the contraction in inflation that the president is really calling attention to.”

Brainard’s comments came hours after the consumer price index showed inflation moving ahead of expectations, rising 0.3 percent in January. In particular, food prices fell by 0.4% during the month. Consumer brands like it Coca Cola, PepsiCo, Procter & Gamble and others have raised prices over the past year to keep profits afloat.

Shrinkage inflation, the practice of reducing product sizes while keeping prices the same, is Biden’s latest line of attack against corporations, which he debuted on Super Bowl Sunday.

Both the White House and Biden’s 2024 re-election campaign have touted rebounding inflation as a key achievement of his economic agenda, dubbed Bidenomics. But consumers have yet to feel the relief in their wallets, and they’re blaming Biden for that, according to recent polls. Instead, Biden has pointed the finger at corporate price-gouging tactics, which he says are the real driver of persistently high prices.

“The president will continue to emphasize that input costs have come down, supply chains have healed,” Brainard said. “It will continue to challenge companies to pass those savings on to the American consumer.”

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