Obama-Era CEA President On August Inflation Data: 'I Feel A Bit Worse Than I Did Yesterday'

Prominent economist and Obama-era Chair of the Council of Economic Advisers Jason Furman, in a recent tweet thread, shared his analysis of inflation patterns and the potential implications for the Federal Reserve’s future decisions.

What Happened: Furman, in his posts on X, formerly Twitter, on Tuesday, discussed the August inflation data, suggesting that the core services excluding shelter, which the Federal Reserve tracks, saw a significant rise.

He further touched upon the average hourly earnings trend relative to the pre-pandemic period and emphasized that the data he discussed was mostly about inflation within August. However, he cautioned against reading too much into one month’s data.

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While Furman acknowledged feeling more optimistic than a few months ago about the possibility of a soft landing, he also expressed some concerns based on August data.

He further stated that one month of data should not impact the Fed’s decisions but indicated that continued similar trends might warrant action at the December meeting.

Why It Matters: Furman said in the thread that he feels “better” than he did some months ago “about the possibility of a soft landing” but at the same time feels a “bit worse” than he did yesterday.

The August Consumer Price Index (CPI) report showed a more-than-expected rise in consumer inflation. The headline consumer inflation rose to 3.7% year-over-year, up from July's 3.2%, driven mainly by rising energy costs. Meanwhile, core inflation, excluding energy and food, came in as expected, down from 4.7% to 4.3% year-on-year.

Earlier, Furman had backed the call to raise the Fed’s inflation target to 3% and had suggested that the Federal Reserve has a lower threshold for raising rates than for cutting them, as reported in a previous Benzinga article.

Photo by Gerald R. Ford School Of Public Policy on Flickr

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