During an interview aired on Friday’s broadcast of Bloomberg’s “Wall Street Week,” Harvard Professor, economist, Director of the National Economic Council under President Barack Obama, and Treasury Secretary under President Bill Clinton Larry Summers said that the November jobs report shows that “we’ve got a long way to go to get inflation down” to where we want it to be and “inflation is going to be a little more sustained than what people are looking for.”
Summers stated, “Look, what we saw was a 7.5% annual wage increase for the month, a 6% wage increase for the last three months, and a 5% increase for the year. So, it’s high and it’s rising. And the labor market is strong and we’re still in unprecedented territory in terms of the gap between vacancies and jobs. And I think that what that’s got to tell you is that we’ve got a long way to go to get inflation down where the Fed has said that it wants it to be. We don’t know where this is — how this is all going to play out. But, for my money, the best single measure of core underlying inflation is to look at wages. … I think what this is telling us is that the Fed’s got a long way to go.”
He added that “we’re probably going to need increases in interest rates, I suspect they’re going to need more increases in interest rates than the market is now judging, or than they’re now saying. … I hope I’m wrong, but my sense is that inflation is going to be a little more sustained than what people are looking for.”
Follow Ian Hanchett on Twitter @IanHanchett
COMMENTS
Please let us know if you're having issues with commenting.