As President Donald Trump struggles to address Americans’ growing affordability concerns, he has found some sympathy from one of former President Barack Obama’s top economists.
said Jason Furman, Harvard Kennedy School of Government professor and former chairman of the Council of Economic Advisers under Obama. CNBCWednesday’s “Squawk Box” pessimistic consumers ignore gas prices that remain affordable, making Trump’s job to address the affordability crisis more challenging.
December gas prices marked their lowest all year, with unleaded gasoline $0.18 cheaper nationally this year than last year, according to data from Motor Club AAA. National average prices hit their cheapest on Monday, hitting $2.85 a gallon. That hasn’t stopped consumer confidence from falling to its lowest level since April, and approval ratings indicating that many Americans disagree with how Trump is handling the economy.
“I’m confused,” Furman said. “When you’re in government, you’re told, politically, the one price that matters is the price of gasoline. It’s a price that’s been great this year. And I feel a little bad for President Trump that he doesn’t get any credit for that.”
Trump has continued to offer his own mixed signals on the affordability crisis, including in a primetime address last week that he found the economy “messed up” by the Biden administration, proposing to cut checks for millions of military personnel for housing supplements, while simultaneously calling the economy the strongest.
According to Furman, Trump also has a bit of a tough crowd: Consumers are worried about inflation and grocery prices, which have risen nearly 30% over the past five years, making it harder to ease economic worries, even if there are other hopeful signs.
“Consumers are just kind of like, whatever is the highest price, that’s the price they’re going to focus on and get frustrated with,” he said. “And it’s a really hard problem to solve economically or politically.”
Contradictory economic indicators extend beyond prices, Farman said. The US saw its strongest economic growth in two years last quarter with 4.3% GDP growth, exceeding previous analysts’ estimates. Meanwhile, the unemployment rate rose to 4.6% in November, according to the Bureau of Labor Statistics, significantly higher than last November’s 4.2% and above 4%, which is considered reasonable.
