Sen. Mike Rounds (R-S.D.) on Sunday said there could be “more serious economic issues coming very shortly” for Americans, pointing to news the economy shrank in the last two quarters and that wages are not keeping up with inflation.
“What you’re actually seeing, we believe, might be a precursor to what’s to come,” Rounds told host George Stephanopoulos on ABC’s “This Week.” “You’re going to find out the larger companies such as Walmart are talking about starting to reduce the number of people that they’re going to be employing.”
Inflation has hit a 40-year high, while two consecutive quarters of negative gross domestic product is an indicator the U.S. may be in a recession.
Still, 528,000 jobs were added in July and the unemployment rate dipped to 3.5 percent, extending a healthy trend of job growth that counters the negative outlook. The Biden administration has pushed that message to suggest the U.S. is not in a recession.
Rounds on Sunday said that strong job growth was a good sign, but stressed wages are not keeping up with inflation.
“I don’t think we can necessarily say that that is not a precursor yet to probably some more serious economic issues coming very shortly,” he said on ABC. “We hope that we’re building our way out of a recession but you don’t do that by raising taxes. You do it by promoting and expanding businesses, getting the economy rolling again.”
The senator also told Stephanopoulos that if Congress passes the highly anticipated Inflation Reduction Act, which aims to increase taxes on the wealthy and corporations, “Americans are going to feel” the consequences.
“What you’re going to see are normal American families actually see the impact of what happens whenever you put new taxes on our economy,” he said. “Now they talk about it being on big corporations but as big corporation raise prices they do pass it all down.”
“So from our perspective, we will see those tax increases coming down the line and Americans are going to feel it,” he added.