Jobs
Summers Discounts Rise in Labor Force, Sees 6% Unemployment Risk
- Former Treasury chief says more workers means more demand
- Summers flags China capital flight as sign of alarm on economy
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Former Treasury Secretary Lawrence Summers discounted any optimism over an influx of people into the US labor force in August, focusing instead on the inflationary potential of continued strong employment gains.
“There’s a tendency to exaggerate how much higher participation will reduce inflation,” Summers told Bloomberg Television’s “Wall Street Week” with David Westin. “People think of it as extra labor supply, but they forget” about the rise in employment that increases incomes and therefore spending, in turn boosting demand for labor, he said.