While President Donald Trump grapples with addressing Americans’ mounting affordability worries, he has received a measure of sympathy from a former top economic advisor to ex-President Barack Obama.
Jason Furman—a Harvard Kennedy School of Government professor and former chair of the Council of Economic Advisers under Obama—noted Wednesday that pessimistic consumers have overlooked the continued affordability of gas prices, making Trump’s task of tackling the affordability crisis more difficult.
According to AAA motor club data, gas prices in December reached a low point, with unleaded gasoline costing $0.18 less nationally this year than last. The national average hit its cheapest on Monday at $2.85 per gallon. This hasn’t stopped consumer confidence from declining since April, nor has it slowed the trend of more Americans disagreeing with Trump’s handling of the economy.
“I’ve been confused,” Furman said. “In government, you’re told politically that the only price that matters is gasoline. That’s the one price that’s been strong this year. And I kind of feel a tiny bit sorry for President Trump that he isn’t getting any credit for that.”
Trump has continued to send mixed signals on the affordability crisis—including claiming in a recent statement last week that he inherited an economic “mess” from the Biden administration, offering to push for housing supplements, while simultaneously calling the economy the strongest it’s ever been.
Per Furman, Trump also faces a tough audience: Consumers are concerned about inflation and grocery prices, which have risen over the past five years, making it harder to ease economic anxieties even amid other positive signals.
“Consumers are in this mindset where they fixate on and get upset about whichever price is the highest,” he explained. “And that’s a really hard problem to solve, whether economically or politically.”
Conflicting economic signals cloud the K-shaped economy narrative
Furman noted that conflicting economic indicators go beyond prices. Last quarter, the U.S. saw its strongest economic growth in two years—surpassing analysts’ previous estimates. Meanwhile, the November unemployment rate (per the Bureau of Labor Statistics) was markedly higher than last November’s 4.2% and above the 4% threshold considered reasonable.
“If all we had were the jobs numbers, we’d all be calculating recession probabilities right now—30%? 50%? 70%?” Furman asked. “But then we have this GDP growth figure, which shifts the conversation to boom probabilities.”
Unlike many economists who highlight the rich getting richer while the poor get poorer, Furman isn’t convinced. He pointed out that alongside consistently low prices like gas, wage growth remains strong—a metric tied to increased spending and productivity. To be clear, data from the Federal Reserve Bank of Atlanta shows wage growth for the lowest-wage quartile of Americans dropped from a 2022 high of 7.5% to about 3.5% today, its lowest in a decade.
“I’m less sold on the K-shaped recovery idea than others are,” Furman said. “Everyone wants prices to be 25% lower. Nobody wants their wages to be 25% lower.”
Other economists, such as chief economist Diane Swonk, see a link between economic growth, rising unemployment, and the K-shaped economy. Swonk argued that strong GDP growth reflects a K-shaped economy where—in addition to resilient consumer spending and skyrocketing corporate profits—businesses have learned to grow without hiring, padding margins without expanding their teams. This trend could be exacerbated by ongoing factors.
“Most of the productivity gains we’re seeing now are just a residual effect of companies being hesitant to hire and doing more with fewer workers,” she said.