As President Donald Trump tries to answer Americans’ rising anxiety about affordability, he’s getting an unexpected note of sympathy from a prominent economist who served under former President Barack Obama.
Jason Furman—a Harvard Kennedy School professor and former chair of the Council of Economic Advisers during the Obama administration—said on CNBC’s “Squawk Box” on Wednesday that many consumers may be overlooking one major cost that has stayed relatively manageable: gasoline. In his view, that dynamic makes it harder for Trump to convince voters the affordability picture is improving.
Gas prices in December were the lowest they’ve been all year, according to AAA data. Nationally, unleaded gasoline is about $0.18 cheaper than it was at this time last year, and the national average hit its low point on Monday at roughly $2.85 per gallon. Even so, consumer confidence has slid to its weakest level since April, and polling shows more Americans disapprove than approve of Trump’s handling of the economy.
“I’ve been puzzled,” Furman said. “When you’re in government, you’re told, politically, the one price that matters is the price of gasoline. That’s the one price that’s been great this year. And I sort of feel a tiny bit bad for President Trump that he doesn’t get any credit for that.”
Trump, meanwhile, has offered shifting messages on affordability. In a primetime address last week, he said he inherited an economic “mess” from the Biden administration. He also floated ideas such as cutting checks for millions of military personnel to help with housing—while at other moments describing the economy as the strongest it has ever been.
Furman argued that Trump is facing a skeptical audience. Many households remain fixated on groceries and other everyday essentials, which have climbed sharply in recent years. He pointed to grocery prices rising by nearly 30% over the past five years—a reality that can dominate perceptions even if some other costs look better.
“Consumers are just in this sort of, whatever the highest price is, is the price they’re going to focus on and be upset about,” Furman said. “And that’s a really hard problem to solve economically or politically.”
Strong GDP, Rising Unemployment, and Conflicting Signals
Furman also noted that the economic picture is sending mixed signals beyond consumer prices. U.S. GDP grew at an annualized 4.3% last quarter, the strongest pace in two years and above analysts’ expectations. At the same time, the unemployment rate ticked up to 4.6% in November, according to the Bureau of Labor Statistics—up from 4.2% a year earlier and above the 4% level many consider broadly healthy.
“If all you had were the jobs numbers, we’d all be doing our recession probabilities right now—Is it 30%? Is it 50%? Is it 70%?” Furman said. “But then we have this GDP growth number, and that just gives us our boom probability.”
Unlike economists who argue the U.S. is experiencing a sharply K-shaped economy—where higher earners surge ahead while lower-income households fall behind—Furman said he’s not fully persuaded. He pointed to continued wage growth as a counterweight, even if it has cooled. Data from the Federal Reserve Bank of Atlanta shows wage growth for the lowest-wage quartile falling from a peak of 7.5% in 2022 to roughly 3.5% today, the weakest pace in a decade.
“I’m less convinced about this K-shaped recovery than other people are,” Furman said. “Everyone wants prices to be 25% lower. Nobody wants their wages to be 25% lower.”
Still, other economists see the K-shaped dynamic in the same data. KPMG chief economist Diane Swonk has argued that strong GDP growth can coexist with rising unemployment when companies grow output without expanding headcount—boosting profits and productivity by doing “more with less.” She has also warned that this pattern could accelerate if AI adoption displaces certain roles.
“We are seeing most of the productivity gains we’re seeing right now as really just the residual of companies being hesitant to hire and doing more with less,” Swonk said.
