Inflation alarms ex-Treasury boss
Larry Summers said his concerns about inflation have only grown following Friday’s jobs report showing that US companies added 528,000 people to their payrolls last month — more than double what analysts had predicted.
The former Treasury secretary said that while it is good that companies are hiring more Americans, it will complicate the Federal Reserve’s efforts to bring skyhigh inflation under control.
“I’m more worried about inflation tonight than I was last night,” Summers said Friday. “And I think it’s misleading not to see things that way.”
The most recent inflation data show that consumer prices rose by 9.1% in June — the highest since November 1981.
Summers told CNN on Friday that “there’s nothing in this report to suggest that we’re getting inflation under control — rather the opposite.”
“Look, it’s always welcome news when people are getting jobs,” said the former Harvard University president who also served as an economic adviser to President Barack Obama.
Summers then pushed back on CNN anchor Wolf Blitzer when he noted that the US had regained the jobs lost during the COVID pandemic.
“It’s welcome news when wages are going up. But I have to say, I don’t think it’s quite as rosy as your report suggested,” Summers said. “The principal problem of the economy for some time has been inflation.”
Summers, who has drawn fire from critics for suggesting that unemployment must rise in order to bring down the high cost of products, noted that while wages are up, they still lag behind the rate of inflation.
“Yes, wages did go up half a percent last month. But that’s about a 6% annual rate, and inflation has run at about 9% over the last year,” Summers said.