Inflation Is Slowing — Without the Higher Unemployment Larry Summers Said Was Necessary

Source: The Intercept
by Ken Klippenstein & Jon Schwarz

“Last week, former Treasury Secretary Larry Summers — speaking in front of a picturesque tropical backdrop — delivered somber news for workers: Millions of people would have to lose their jobs to hold inflation at bay. Summers has called for 5 percent unemployment for five years or 10 percent for 1 year to tame inflation. (The current unemployment rate stands at far less than that: 3.5 percent.) Summers had been hailed as a prophet for warning back in 2020 that pandemic-driven inflation was long term rather than temporary, necessitating, in his opinion, an engineered slowdown in the economy — a tough-love approach he was credited with having the courage to voice. But the new consumer price index released today flies in the face of Summers’s analysis, showing a decline in inflation far more rapid than the yearslong battle he has repeatedly insisted would be necessary.” (01/12/23)