OBAMA ADVISER GOOLSBEE: 'New presidents get a year or so to do anything and I think they've used...

[DonViejo]

OBAMA ADVISER GOOLSBEE: 'New presidents get a year or so to do anything and I think they’ve used it up'

Pedro Nicolaci da Costa

Austan Goolsbee, President Barack Obama's former chief economic adviser, tells Business Insider he sees decent, but not spectacular, economic growth ahead.

Goolsbee says he wants to see solid signs of sustained wage growth before making the case that the economic recovery is complete and the job market is fully healed.

Gooslbee believes the Federal Reserve may have trouble justifying continued interest rate hikes if inflation and wages don't pick up.

For Federal Reserve officials and Wall Street economists, the lack of wage growth in the face of falling US unemployment is an intriguing intellectual puzzle. For American workers, it’s part of an all-too-concrete daily struggle that leaves millions on the edge of financial calamity.

In an interview with Business Insider, President Barack Obama’s former economic adviser Austan Goolsbee, now back at the University of Chicago, said stagnant wages represent one key factor that could prevent the Federal Reserve from continue raising interest rates in 2018 and 2019 as it currently expects to do.

"My forecast for the economy is decent but not spectacular, very similar to the last six years — and that makes me think that the Fed won’t be able to hike rates as much as they think they will," Goolsbee said.

US economic growth has hovered around 2% for much of the recovery period following the Great Recession, which was the worst downturn in modern history, even if the past couple of quarters have shown quarterly annualized readings around 3%.

more
http://www.businessinsider.com/obama-adviser-austan-goolsbee-says-economy-resilient-not-spectacular-2017-12