Ex-Treasury chief Larry Summers says it's still too early to declare victory on inflation
Former Treasury Secretary Larry Summers still sees a path forward for the US to avoid a recession, but he said the"I don't think we can yet be confident that we're not going to see a real acceleration of inflation at some point down the road," Summers toldThe economy added 187,000 jobs last month, lower than the forecasted 200,000, while the unemployment rate dipped to 3.5% and hourly earnings climbed more than expected with a 0.4% month-over-month increase.
The latest labor market numbers, in Summers' view, aren't fully in line with the Federal Reserve's 2% inflation goal. On a year-over-year basis, wages grew 4.4%, and on an annualized rate versus June, wage growth neared 5%, he estimated. And after accounting for productivity trends, he warned that the jobs data indicate"an underlying inflation rate in 3.5% range — and it may not be decelerating."
"If you look at wage inflation, it was faster for the month than for the quarter, faster for the quarter than for the year," Summers said."And running for the quarter at about 4.9%. That's not consistent with 2% underlying inflation or close."
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