NEC's Hassett Says Inflation Is Under Control

Summary

Kevin Hassett, director of the White House National Economic Council, argues that the US labor market is strong, wages are rising, and inflation is under control, with core CPI running around 1.6% annualized over three months. He contends strong growth is not inflationary because of positive supply-side developments such as factory building and AI-driven productivity. Hassett also says the administration respects Fed independence and that Fed policy should focus on inflation rather than growth alone.

• Hassett calls the jobs report a Labor Day weekend present and says the president's economic policies are working.
• Average weekly earnings are soaring, with salaries up 4% so far this year.
• Core CPI over the last three months is estimated at a 1.6% annualized rate, below the Fed's target.
• He attributes weak consumer sentiment partly to partisan skew in surveys.
• He says growth around 5% can be non-inflationary because of factory building and AI productivity.
• He says the Fed should focus on inflation rather than growth when setting rates.