Hassett Speaks On Gas Prices

Gasoline prices have climbed back above $4 a gallon nationwide, putting renewed pressure on American household budgets as the conflict with Iran disrupts global energy supplies.

White House National Economic Council Director Kevin Hassett acknowledged Sunday that fuel costs remain higher than the Trump administration wants. However, he argued that falling crude oil prices, increased U.S. energy production and steps taken by the administration could eventually bring motorists significant relief.

Hassett also defended the strength of the broader U.S. economy following a disappointing July employment report that showed a loss of 23,000 jobs.

His comments come as Americans continue watching two closely connected economic concerns: the cost of living and the strength of the job market.

Gas Prices Rise Above $4 a Gallon

According to AAA, the national average price for regular gasoline reached $4.01 per gallon Sunday.

That represents an increase of 17 cents compared with one month earlier and 87 cents compared with the same period last year.

The increase can be particularly difficult for retirees, working families and people living on fixed incomes.

Higher gasoline prices also affect more than drivers. Businesses frequently face increased transportation and shipping expenses when fuel costs rise, potentially adding pressure to the prices consumers pay for groceries and other everyday necessities.

The latest increase has been closely tied to instability in the Middle East.

Iran Conflict Disrupts Major Oil Shipping Route

Iran’s response to the joint U.S.-Israeli military operation launched Feb. 28 severely disrupted traffic through the Strait of Hormuz.

The narrow waterway is one of the world’s most important routes for transporting oil and other energy supplies. A disruption there can quickly affect international crude prices and, eventually, what American motorists pay at the pump.

Despite those challenges, Hassett said there are signs that energy markets are beginning to stabilize.

Brent crude settled Friday at $83.55 per barrel. That was $7.25 higher than a month earlier but substantially below the roughly $119-per-barrel level reached in April.

During an appearance on CNN’s “State of the Union,” Hassett noted that crude prices surged beyond $100 a barrel during the early stages of the conflict before retreating toward approximately $80.

He credited the U.S. Navy’s efforts to escort vessels leaving the Gulf as one factor helping ease pressure on the oil market.

Could Gas Prices Start Falling?

The decline in crude oil prices could eventually be good news for Americans paying higher prices at gas stations.

Crude oil is one of the biggest components affecting the retail cost of gasoline. However, changes in oil markets are not always immediately reflected at the pump because refining costs, distribution expenses, taxes and regional supply conditions also influence retail prices.

Hassett said the Trump administration has taken additional measures intended to increase available fuel supplies and reduce transportation constraints inside the United States.

Among the most notable was a waiver involving the Jones Act.

Trump Administration Waives Jones Act Requirements

The Jones Act is part of a federal maritime law dating to 1920.

Generally, merchandise transported by water between U.S. ports must use vessels that satisfy American construction, ownership, registration and crewing requirements.

By waiving those restrictions under certain circumstances, the administration can expand the pool of ships available to transport domestic oil and fuel between American ports.

Hassett said the action has helped facilitate the movement of approximately 100 million barrels of Gulf of America-produced oil to the East and West coasts.

He argued that expanding transportation capacity, combined with increased U.S. energy production, has helped put downward pressure on prices.

While Hassett acknowledged that gasoline remains more expensive than the administration would like, he expressed confidence that prices could fall further if conditions in the Persian Gulf improve.

For millions of Americans, whether that prediction becomes reality could have a noticeable impact on household finances.

Why Lower Gas Prices Matter to Americans

The price displayed at the local gas station is one of the most visible economic indicators for consumers.

A household buying 50 gallons of gasoline each month, for example, spends an additional $43.50 monthly when gasoline is 87 cents per gallon more expensive. Over an entire year, that difference would exceed $500 if prices remained at the higher level and consumption stayed the same.

That can be meaningful for seniors on fixed incomes and families already paying for groceries, utilities, insurance, housing and healthcare.

Lower energy costs can therefore provide benefits beyond simply making it cheaper to fill a vehicle.

Transportation expenses influence businesses throughout the economy, from trucking companies and manufacturers to farms and retailers. Sustained reductions in energy prices can help ease some of those cost pressures.

July Jobs Report Shows 23,000 Jobs Lost

Hassett also faced questions Sunday about another closely watched measure of the economy: employment.

The latest jobs report showed that the U.S. economy shed 23,000 jobs in July.

June’s employment figure was also revised downward to a gain of just 20,000 jobs.

CNN host Jake Tapper challenged Hassett over the numbers after the White House adviser had previously offered a highly favorable assessment of the U.S. labor market.

Hassett responded by arguing that monthly employment figures can undergo significant revisions and that one report should be considered alongside other measures of economic activity.

He maintained that the overall economy remains strong.

Hassett Points to Construction and Manufacturing Investment

One area Hassett highlighted was construction associated with new manufacturing facilities.

According to Hassett, approximately 83,000 construction workers are currently involved in building factories across the country, a figure he described as historically significant.

He also pointed to unemployment insurance claims and job openings as evidence that underlying labor-market conditions remain healthier than the July headline number might suggest.

Hassett said initial claims for unemployment benefits are exceptionally low and maintained that available job openings continue to outnumber unemployed workers.

Those indicators form the basis of his argument that the latest employment report does not necessarily signal a broader economic downturn.

White House Explains Weak July Employment Numbers

Hassett attributed a substantial portion of July’s weakness to declines in government and hospitality employment.

He said seasonal factors involving teachers contributed to the government employment decline during July.

Hassett also connected some of the weakness in hospitality employment to workers seeking unemployment benefits following the conclusion of the World Cup.

After accounting for those unusual factors, Hassett argued that underlying job creation would be considerably closer to the approximately 100,000 jobs economists had expected.

That interpretation presents a more favorable picture of the labor market, although future employment reports will provide important evidence about whether July represented a temporary setback or the beginning of a more persistent slowdown.

What Americans Should Watch Next

For many voters, debates over economic statistics ultimately come down to a much simpler question: Is it becoming easier or harder to afford everyday life?

Gasoline prices remain a major part of that equation.

The Trump administration is betting that increased domestic energy production, additional transportation capacity and improved security for oil shipments will help reduce prices once tensions surrounding the Persian Gulf ease.

The direction of crude oil prices will be one important factor to watch.

If oil continues falling from its wartime highs, motorists could eventually see additional relief at gas stations. If geopolitical tensions intensify and oil supplies face further disruption, consumers could instead remain under pressure.

Employment will be another major indicator.

One weak monthly report does not by itself establish the direction of the U.S. economy. Additional jobs reports will help determine whether July’s decline was temporary or evidence of a broader slowdown.

For now, the White House is acknowledging what American drivers already see every time they fill their tanks: gas prices remain too high.

Hassett’s message, however, is that the administration believes the policies already put in place — combined with easing oil prices and stronger domestic energy production — could eventually provide American consumers with meaningful relief.