As President Donald Trump struggles to address Americans\u2019 growing affordability concerns, he has gotten some sympathy from one of former President Barack Obama\u2019s former top economists.<\/p>\n
Jason Furman, Harvard Kennedy School of Government professor and former chair of the Council of Economic Advisers under Obama, told CNBC\u2019s \u201cSquawk Box\u201d<\/a> on Wednesday pessimistic consumers have overlooked gas prices that have remained affordable, making Trump\u2019s job of addressing the affordability crisis more challenging.<\/p>\n Gas prices in December marked the lowest they\u2019ve been all year<\/a>, according to data from motor club AAA, with unleaded gasoline $0.18 cheaper nationally this year compared to last. National average prices reached their cheapest on Monday, hitting $2.85 a gallon. That hasn\u2019t stopped consumer confidence falling to its lowest level<\/a> since April, and approval ratings<\/a> indicating more Americans disagree with how Trump is handling the economy.<\/p>\n \u201cI\u2019ve been puzzled,\u201d Furman said. \u201cWhen you\u2019re in government, you\u2019re told, politically, the one price that matters is the price of gasoline. That\u2019s the one price that\u2019s been great this year. And I sort of feel a tiny bit bad for President Trump that he doesn\u2019t get any credit for that.\u201d<\/p>\n Trump has continued to offer his own mixed signals on the affordability crisis, including saying in a primetime address<\/a> last week he inherited an economic \u201cmess\u201d from the Biden administration, offering to cut checks for millions of military personnel<\/a> for housing supplements, while simultaneously calling the economy the strongest it\u2019s been.<\/p>\n According to Furman, Trump also has a bit of a tough crowd: Consumers have been concerned about inflation and the price of groceries, which have increased nearly 30%<\/a> over the past five years, making it more difficult to assuage economic anxieties, even when there are other optimistic signals.<\/p>\n \u201cConsumers are just in this sort of, whatever the highest price is, is the price they\u2019re going to focus on and be upset about,\u201d he said. \u201cAnd that\u2019s a really hard problem to solve economically or politically.\u201d<\/p>\n Conflicting economic indicators extend beyond prices, Furman said. The U.S. saw its strongest economic growth in two years last quarter with a 4.3% GDP growth<\/a>, exceeding past analysts\u2019 estimates. Meanwhile, the unemployment rate creeped up to 4.6%<\/a> in November, according to the Bureau of Labor Statistics, markedly higher than last November\u2019s 4.2% and above 4%, which is considered reasonable.<\/p>\n \u201cIf all you had were the jobs numbers, we\u2019d all be doing our recession probabilities right now\u2014Is it 30%? Is it 50%? Is it 70%?\u201d Furman questioned. \u201cBut then we have this GDP growth number, and that just gives us our boom probability.\u201d<\/p>\n Unlike many economists who see a lopsided, K-shaped economy<\/a> of the rich getting richer while the poor get poorer, Furman isn\u2019t so sure. He noted that on top of some consistently low prices, such as gas, wage growth is still strong, a metric associated with increased spending and productivity. To be sure, data<\/a> from the Federal Reserve Bank of Atlanta Fed indicates wage growth for the quartile of lowest-wage Americans went from a high of 7.5% in 2022 to about 3.5% today, its lowest in 10 years.<\/p>\n \u201cI\u2019m less convinced about this K-shaped recovery than other people are,\u201d Furman said. \u201cEveryone wants prices to be 25% lower. Nobody wants their wages to be 25% lower.\u201d<\/p>\n Other economists, such as KPMG<\/a> chief economist Diane Swonk, see the connection between economic growth, rising unemployment, and the K-shaped economy. Swonk told Fortune<\/a> the strong GDP growth was indeed reflective of a K-shaped economy where\u2014in addition to resilient consumer spending and skyrocketing corporate profits\u2014businesses have learned to grow without hiring, padding margins without expanding their team, a trend that could be exacerbated by AI displacing jobs<\/a>.<\/p>\n \u201cWe are seeing most of the productivity gains we\u2019re seeing right now as really just the residual of companies being hesitant to hire and doing more with less,\u201d she said.<\/p>\n