Kevin Hassett, National Economic Council director, joins 'Squawk Box' to discuss why affordability is such a problem, the consistent inflation and much more.

White House National Economic Council Director Kevin Hassett stated that wage increases are expected to continue, even as inflation remains above recent historical averages. Hassett noted that while real wages fell during recent years due to inflation, purchasing power has begun to recover, with real wages rising by approximately $1,200 over the past year.

Hassett also addressed the rising costs of essentials such as groceries and housing, attributing much of the inflation to previous policy decisions and government spending. He highlighted that sectors receiving significant government subsidies, such as health insurance under Obamacare, have seen the fastest price increases, and he expressed optimism that ongoing wage growth will help improve consumer sentiment.

Wage increases will continue, says NEC director Kevin Hassett

White House National Economic Council Director Kevin Hassett. Good morning. Kevin, how are you? You guys had a great marriage session there, marriage counseling session. I think there's hope for you, too. There's hope. We got – maybe we cover the gamut. Professional optimist, professional skeptics. Maybe the truth is somewhere in the middle, Kevin. And I have been fairly optimistic. When people come on about the U.S. economy, I can find a lot of positive things. Why do you think affordability is such a buzzword right now? I mean, we live through 9 percent inflation. And I think Biden years, it averaged over 5 percent for those four years. We're at the highest levels that we've seen recently at 3 percent. Why all of a sudden is it – I don't know, is it Trump's fault? Right. Well, I mean, for sure people still are trying to dig out from the big hole that was dug by the previous administration's policies. So if you figure the typical mortgage payment, monthly mortgage payment about doubled. If you look at a typical bag of groceries, the monthly bag of groceries cost about $400 when President Trump was leaving office last time and about $512 right about when President Trump took office. And since then it's gone up almost not at all. I think it's like $515, but it hasn't gone back to $400. And so what the Democrats are doing is they're saying that this runaway spending that we gave you guys that created runaway inflation is 100 percent your fault because you haven't fixed it already. So I guess that's very economically illiterate, and I don't think really many people in markets are buying it. Well, I'll tell you, Kevin, one of the reasons I think that people are – and I'm going to highlight both sides. One of the reasons people feel like they're not keeping up is because real average weekly wages fell during the Biden years because of the inflation. $53,000, that's right. Right. So it fell. However, the president is constantly saying prices have come down. Now, inflation is still 3 percent. It's still too high. Now, oil prices, energy prices, there are certain things where they have come down. But when you keep saying prices are falling, that's not true because inflation is still – the 3 percent is on top of all the inflation we had during the Biden years. So we got all that inflation plus an additional 3 percent, and I think you should admit that. A more precise way to say it, though, Joe, is that purchasing power has gone up. So real wages – that's W divided by P for our technical people in the audience – have gone up by about $1,200 this year. So the way to think about it is that we've dug a $3,000 hole because of Biden policies and we've gained $1,200 on the way out already, which should give you a great deal of hope for the future that the wage increases that we're seeing will continue. And even if inflation stays positive, make it so that people feel way better when they go to the grocery store to buy a car. You know, we've reduced the cost of buying a car with the deductibility of interest. I mean, there's a million things that we're doing to fix this problem, but it's just kind of astonishing to me that the cost problem is somehow being blamed on us. Now, think about it, especially with the Obamacare thing. So Obamacare is 100 percent Democratic policy. It's always been 100 percent Democratic policy. What they did is they expanded the subsidies during COVID, and then all those subsidies basically went right into the pockets of insurance companies and Obamacare insurance policies have doubled in price relative to normal policies. And so the fastest inflation in the economy is these big government subsidies thrown at Obamacare insurance. Think about it, it's kind of like if you give lots of student loans, then the tuition goes up. It's that effect. And so now they're blaming President Trump for Obamacare as well. They should have fixed Obamacare in the first place, and President Trump had a plan in the big, beautiful bill to give people some subsidies, but the Democrats didn't like it because the subsidies weren't going to their campaign contributors, the insurance companies.

Israeli Prime Minister Benjamin Netanyahu vowed to oppose any attempt to establish a Palestinian state, a day before the UN Security Council will vote on a U.S.-drafted resolution on Gaza that leaves the door open to Palestinian independence.

Tel Aviv-Yafo

Middle East Conflict

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Dhaka

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Belém

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Los Angeles International Airport

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Taipei City

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Jeff Bezos's Blue Origin successfully launched its New Glenn rocket on Thursday with NASA twin spacecraft destined for Mars aboard, and in a breakthrough nailed the landing of its booster.

Cape Canaveral

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Beijing

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Breakdown