Fmr. Obama Econ. Adviser Furman: Not ‘Much Progress’ on Inflation, Never Had Needed Decrease Without Large Unemployment Increase

On Friday’s broadcast of CNN International’s “Quest Means Business,” Professor of the Practice of Economic Policy at Harvard University and the Harvard Kennedy School Jason Furman, who served as Chairman of the Council of Economic Advisers under President Barack Obama and on the Council of Economic Advisers and the National Economic Council under President Bill Clinton, stated that over the last year, “We haven’t seen much progress on actual inflation.” And that we have never seen inflation fall the way we need it to “with unemployment anything like where it is now.”

Host Richard Quest asked, “Are we within striking distance of a soft landing here?”

Furman answered, “I don’t think so. I think people are getting out over their skis. The labor market data looks great. But now let’s go look at the inflation data. That’s been running — core inflation, underlying inflation, about 4.5% for the last year, pretty consistently. We haven’t seen much progress on actual inflation. I hope we get it. But there [are] a lot of inferences and models between here and there that I’m not sure I believe.”

He added, “[W]e’ve never seen inflation fall by 2.5%, which is what we need, with unemployment anything like where it is now. Could we see something completely unprecedented happen here? Yes. I’m rooting for that. I hope that happens, but that’s not what I’m predicting.”

Furman later added that a 2.9% inflation rate would be acceptable.

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