Friday 10 June 2022 05:22 PM Obama economist Jason Furman says inflation is NOT in a sustainable place trends now
Another Obama-era economic advisor put out a warning about inflation figures after May figures revealed that the consumer price index has jumped to a 41-year-high at 8.6 percent.
The new figures blew past expectations and dashed any hope that consumer price increases had peaked. Gas prices, meanwhile, are averaging at $4.98 a gallon, according to AAA, well beyond double what they were when President Biden took office.
'Look, right now, you know, if you tamp down on the economy, you're going to slow price growth and you're going to slow wage growth. I don't have any obvious answer for which one of those slows more than the other,' top Obama economist Jason Furman said on CNBC Friday morning.
'Right now, we're in a bad situation where we have a lot more price inflation than wage inflation.'
'May be slow the economy, may be slow prices more than wages. I just don't know which of those slows more, so we may be helping people. But we're not in a sustainable place right now,' he said.
The new figures released on Friday suggested that the Federal Reserve could continue with its rapid interest rate hikes to combat inflation, and markets reacted swiftly, with the Dow shedding more than 700 points in early trading.
The Labor Department's report showed that the consumer price index jumped 1 percent in May from the prior month, for a 12-month increase of 8.6 percent.
The annual increase, driven by soaring food and energy prices, was hotter than economists had expected, and topped the recent peak of 8.5 percent set in March, reaching a level not seen since December 1981.
Food prices have also risen quickly, impacted by rising commodities in the wake of Russia's invasion of Ukraine. Groceries were up 11.9 percent last month, while food away from home rose 7.4 percent.
Prices for services like rents, hotel accommodation and airline travel were also high last month.
It also marked the strongest signal yet that inflation has not yet peaked, as Biden previously claimed as far back as December.
Meanwhile, the Biden administration has been taking heat for price rises from all angles, most especially from Obama and Clinton-era advisors.
Obame economist Stephen Rattner blamed the federal government under Biden and Congressional Democrats for 'putting too much money in people's pockets.'
'We’re all paying the price for having overstimulated this economy during the pandemic and putting too much money in people's pockets which created a lot of this inflation,' Rattner said on MSNBC's Morning Joe Wednesday.
'There’s no free lunch here, now we’re all going to have to pay the price.'
Clinton Treasury Sec. Larry Summers
