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After searing inflation, “American workers are getting ahead,” Treasury Secretary Janet Yellen says
Treasury Secretary Janet Yellen said “American workers are getting ahead” now that their pay is growing faster than inflation, making the Biden administration’s case that the U.S. has rebounded from the economic calamity caused by the pandemic.
“We know that Americans are experiencing discomfort because some important prices are higher than they were pre-pandemic,” Yellen told “CBS Evening News.” “But what I think is really important is that wages have gone up along with prices, so people are better off than they were pre-pandemic.”
Inflation ranked as the most important problem facing the U.S. in a December poll of American adults by CBS News, even outpacing issues like immigration and the state of democracy. Prices skyrocketed in the aftermath of the COVID-19 pandemic, with inflation reaching a 40-year high of 9.1% in June 2022, squeezing millions of households whose incomes failed to keep pace.
Inflation has rapidly cooled since then, thanks in part to a series of interest rate hikes by the Federal Reserve starting in March 2022 aimed at dampening consumer demand and slowing economic growth. Experts now say the economy is on solid ground, pointing to strong growth, robust consumer spending and low unemployment, developments that Yellen stressed in her discussion with CBS News.
As of the end of 2023, the typical U.S. worker could afford the same goods and services as in 2019, prior to the pandemic, and had an additional $1,400 to spend or save per year, according to a January analysis by Treasury officials. That’s partly because wages are now outrunning inflation, with hourly earnings jumping 4.5% in January, compared with an annualized inflation rate of 3.1%.
Despite the pinch of inflation, consumers are continuing to spend — one reason why the U.S. economy has so far defied predictions of a recession. And workers are behaving in ways that suggest they are optimistic about the future, Yellen said.
“We’ve seen a record number of small businesses formed, and Americans don’t start up a small business unless they think the prospects are going to be good,” she said. “So I take that as a vote of confidence in where this economy is going.”
“A slap in the face”
Still, many Americans don’t view the economy through the same lens as bullish economists. And Yellen acknowledged that life remains precarious for millions of people.
“Childcare is expensive. Education is expensive,” Yellen said. “We know that almost half of Americans on one occasion or another have felt they couldn’t afford to fill a prescription. It was that or not having enough to eat, so there’s no question that Americans have experienced burdens.”
Voters in the battleground state of Michigan who spoke with “CBS Evening News” expressed a host of economic worries, from housing prices to student debt. One of them, Demar Byas of Pontiac, referred to experts touting the nation’s economic performance as a “slap in the face.”
“You’re celebrating these numbers, but we are struggling,” said Byas, who juggles several jobs to make ends meet. “It’s no relief in sight, and just say those numbers and to celebrate that, and as I said stuff becomes a slap in the face.”
Underlying many of their concerns is anxiety about the surging cost of car insurance and housing, as well as a sense that it’s more difficult now to achieve the same standard of living as in prior generations. So-called “referred pain,” or fears about the state of the world, from climate change to gun violence, is one reason why some experts believe voters view the economy negatively despite evidence it is doing well.
Another Michigan resident, Elizabeth Nelson of Ann Arbor, said she worries about the future for her children, ages 19 and 21.
“What I’m reading and hearing about the job market, I’m scared for them. I’m really scared for them,” Nelson said. She added, “We’re losing some real low rungs on the ladder of economic security across lifetimes.”
Where does inflation go from here?
Yellen said that President Joe Biden’s policies are aimed at addressing some of the anxieties experienced by voters, from capping insulin prices to bringing down energy costs. She also predicted that inflation will continue to recede.
“Americans should feel confident that inflation will come down to levels that will no longer really be noticeable or worrisome to them,” Yellen said.
She also expects relief on another key issue for many voters — the ongoing increase in home prices and rents. “What we can see is that the rental prices for new apartments are no longer rising. And in some cities they’re actually falling,” Yellen said.
As for the broader economy, Yellen said a recession is unlikely at this point. That’s a stark change from a year ago, when many economists were predicting a steep downturn.
“I consider the odds [of a recession] very low,” Yellen said. “We have a very well-performing economy that has the ability to keep doing what it’s doing, namely grow, create jobs and improve living standards.”
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Sen. Duckworth says Trump defense secretary pick is “flat-out wrong” about women in combat roles
Democratic Sen. Tammy Duckworth said Sunday that Pete Hegseth, President-elect Donald Trump’s pick for defense secretary is “flat-out wrong” in his view that women should not serve in the military in combat roles.
“Our military could not go to war without the women who wear this uniform,” Duckworth said on “Face the Nation with Margaret Brennan.” “And frankly, America’s daughters are just as capable of defending liberty and freedom as her sons.”
Trump tapped Hegseth, a former Fox News host and Army veteran who served in Iraq and Afghanistan as his pick to head the Defense Department earlier this month. The 44-year-old has drawn criticism for his stance on women in combat roles, along with his level of experience.
Duckworth, who in 2004 deployed to Iraq as a Blackhawk helicopter pilot and sustained severe injuries when her helicopter was hit by an RPG, outlined that women who serve in combat roles have met the same standards as men, passing rigorous testing. She said Hegseth’s position “just shows his lack of understanding of where our military is,” while arguing that he’s “inordinately unqualified for the position.”
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“Our military could not go to war without the 220,000-plus women who serve in uniform,” Duckworth said. She added that having women in the military “does make us more effective, does make us more lethal.”
Hegseth has also drawn scrutiny amid recently unearthed details about an investigation into an alleged sexual assault in 2017. Hegseth denies the allegation and characterized the incident as a consensual encounter. The Monterey County district attorney’s office declined to file charges as none were “supported by proof beyond a reasonable doubt.” His lawyer has acknowledged that Hegseth paid a confidential financial settlement to the woman out of concern that the allegation would jeopardize his employment.
Duckworth, an Illinois Democrat who serves on the Armed Services and Foreign Relations Committees, said it’s “really troubling” that Trump would nominate someone who “has admitted that he’s paid off a victim who has claimed rape allegations against him.”
“This is not the kind of person you want to lead the Department of Defense,” she added.
The comments come after Trump announced a slew of picks for top posts in his administration in recent days. Meanwhile, one pick — former Rep. Matt Gaetz for attorney general — has already withdrawn his name from consideration after he faced intense scrutiny amid a House Ethics Committee investigation and a tenuous path to Senate confirmation.
While Duckworth acknowledged that she’s glad her Senate Republicans “held the line” on Gaetz and also elected Sen. John Thune as leader over a candidate favored by many in Trump’s orbit, she said she’s “deeply concerned” her Republican colleagues will green light Trump’s nominees.
“From what I’m hearing from my Republican colleagues on everything from defense secretary to other posts, it sounds like they are ready to roll over for Mr. Trump,” Duckworth said.
But Duckworth didn’t rule out supporting some of the nominees herself during the Senate confirmation process, pledged to evaluate each candidate based on their ability to do the job, and their willingness to put the needs of the American people before “a retribution campaign for Mr. Trump.”
Meanwhile, a CBS News poll released on Sunday found that 33% of Americans say Hegseth is a “good choice” for defense secretary, including 64% of Trump voters. But 39% of Americans said they hadn’t heard enough yet about the pick. More broadly, Americans generally say they want Trump to appoint people who’ll speak their minds and who have experience in the field or agency they’ll run.
Sen. Rand Paul, a Kentucky Republican who also appeared on “Face the Nation” on Sunday, said he believes that Hegseth can run the massive Defense Department, despite his lack of experience managing a large organization. Though he did not address Hegseth’s comments about women in combat roles, Paul said he believes the “vast majority of people” support leaders who are picked based on merit, citing Hegseth’s criticism of the Pentagon for what he says has been a move away from merit-based hiring and toward hiring based on “racial characteristics.”
Hezbollah fired at least 185 rockets and other projectiles into Israel on Sunday, wounding seven people in the militant group’s heaviest barrage in several days, in response to deadly Israeli strikes in Beirut while negotiators pressed on with cease-fire efforts to halt the war.
Meanwhile, an Israeli strike on a Lebanese army center killed one soldier and wounded 18 others on the southwestern coastal road between Tyre and Naqoura, Lebanon’s military said. Israel’s military expressed regret and said the strike occurred in an area of combat against Hezbollah, adding that its operations are directed solely against the militants. The strike was under review.
Hussein Malla / AP
Israeli strikes have killed over 40 Lebanese troops since the start of the war between Israel and Hezbollah, even as Lebanon’s military has largely kept to the sidelines.
Lebanon’s caretaker prime minister, Najib Mikati, condemned it as an assault on U.S.-led cease-fire efforts, calling it a “direct, bloody message rejecting all efforts and ongoing contacts” to end the war.
“(Israel is) again writing in Lebanese blood a brazen rejection of the solution that is being discussed,” a statement from his office read.
The strike occurred in southwestern Lebanon on the coastal road between Tyre and Naqoura, where there has been heavy fighting between Israel and Hezbollah.
Hezbollah began firing rockets, missiles and drones into Israel after Hamas’ Oct. 7, 2023, attack out of the Gaza Strip ignited the war there. Hezbollah has portrayed the attacks as an act of solidarity with the Palestinians and Hamas. Iran supports both armed groups.
Israel has launched retaliatory airstrikes since the rocket fire began, and in September the low-level conflict erupted into all-out war, as Israel launched waves of airstrikes across large parts of Lebanon and killed Hezbollah’s top leader, Hassan Nasrallah, and several of his top commanders.
Hezbollah fired a total of around 160 rockets and other projectiles into Israel on Sunday, some of which were intercepted, the Israeli military said.
Oded Balilty / AP
Israel’s Magen David Adom rescue service said it was treating two people in the central city of Petah Tikva, a 23-year-old man who was lightly wounded by a blast and a 70-year-old woman suffering from smoke inhalation from a car that caught fire. The first responders said they treated three other people in northern Israel, closer to the border, including a 60-year-old man in serious condition.
It was unclear whether the injuries and damage were caused by the rockets or interceptors.
Israeli airstrikes early Saturday pounded central Beirut, killing at least 20 people and wounding 66, according to Lebanon’s Health Ministry.
Israeli attacks have killed more than 3,500 people in Lebanon, according to Lebanon’s Health Ministry. The fighting has displaced about 1.2 million people, or a quarter of Lebanon’s population.
On the Israeli side, about 90 soldiers and nearly 50 civilians have been killed by bombardments in northern Israel and in battle following Israel’s ground invasion in early October. Around 60,000 Israelis have been displaced from the country’s north.
The Biden administration has spent months trying to broker a cease-fire, and U.S. envoy Amos Hochstein was back in the region last week.
The European Union’s top diplomat called for more pressure on both Israel and Hezbollah to reach a deal, saying one was “pending with a final agreement from the Israeli government.”
Josep Borrell spoke Sunday after meeting with Mikati and Lebanese Parliament Speaker Nabih Berri, a Hezbollah ally who has been mediating with the group.
Borrell said the EU is ready to allocate 200 million euros ($208m) to assist the Lebanese military, which would deploy additional forces to the south.
The emerging agreement would pave the way for the withdrawal of Hezbollah militants and Israeli troops from southern Lebanon below the Litani River in accordance with the U.N. Security Council resolution that ended the 2006 war. Lebanese troops would patrol the area, with the presence of U.N. peacekeepers.
Lebanon’s army reflects the religious diversity of the country and is respected as a national institution, but it does not have the military capability to impose its will on Hezbollah or resist Israel’s invasion.
Sen. Tammy Duckworth says Pete Hegseth is “flat-out wrong” about women in combat roles
Sen. Duckworth says Trump defense secretary pick is “flat-out wrong” about women in combat roles
Israeli strike kills Lebanese soldier as Hezbollah fires at least 185 rockets at Israel
Sen. Tammy Duckworth says Pete Hegseth is “flat-out wrong” about women in combat roles
Sen. Duckworth says Trump defense secretary pick is “flat-out wrong” about women in combat roles