White House’s Bernstein: ‘limited’ impact from Red Sea

(Reuters) – The conflict in the Middle East and the disruption to shipping in the Red Sea have so far had only “limited” impact, White House Council of Economic Advisers Chair Jared Bernstein said on Friday, adding that U.S. officials will continue to monitor the situation. 

International shipping companies are avoiding the Red Sea after increased attacks on vessels in the region amid the conflict between Israel and Hamas. The diversions to longer and less-traveled routes threaten to create logistical logjams of the kind that contributed to rising prices and inflation during the COVID-19 pandemic.  

“We’ll remain in touch with our partners to determine any impacts to prices and the impacts to the supply chain,” Bernstein said in a call with journalists following the U.S. Labor Department’s monthly jobs report. “What we’ve seen so far is that the impact of the ongoing conflict has had quite a limited impact on energy prices.”

Bernstein said the December labor market report showed U.S. job growth and wage gains were strong and consistent with an economy that continues to recover from the pandemic-induced recession.

As for inflation, he said, “we are on the path out of the woods, but our work is not done.”