Former Obama adviser: Wages aren't rising fast enough to keep up with inflation

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Former economic advisor to the Obama administration Jason Furman is arguing that wages aren't rising fast enough to keep up with inflation, putting a damper on Friday's promising jobs report. 

During an appearance on MSNBC following the release of the report showing the economy added 678,000 jobs, Furman conceded that, despite the positive employment gain, wages grew at a rate of "basically zero."

Former Obama economic advisor Jason Furman appears on MSNBC on Friday, March 4, 2022. (Screenshot/MSNBC) (Screenshot/MSNBC)

FEBRUARY JOBS SURGE WITH 678,000 ADDITIONS

"Look, this is a great report for employment," Furman told host Chris Jansing. "It wasn’t just the jobs gain this month. It turned out we gained more jobs in December and January than we realized. The unemployment rate went down and people came back into the workforce."

"But here's what was challenging about the report: wage growth was basically zero in a month when we’re probably going to get a decent amount of inflation. And so the economy is adding jobs, but the economy is not raising wages fast enough to keep up with inflation," he added. 

President Biden clears his throat as he announces new steps requiring government to buy more made-in-America goods during remarks in the Eisenhower Executive Office Building's South Court Auditorium at the White House in Washington, March 4, 2022. REUTERS/Evelyn Hockstein (REUTERS/Evelyn Hockstein)

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The February jobs report showed the unemployment rate ticked down to 3.8%, with the number of jobs added far exceeding the estimated 400,000. Wages, however, only grew at a rate of 5.1% year over year for February, and up from 5.7% the month before. 

The increase in wages fell far short of the rate at which inflation has surged this year. It hit a 40-year high of 7.5% year over year in January, essentially erasing any would-be gains for workers at the current rate.