CEA Chair Phelan says the Fed's rate hike 'was a mistake

• September jobs report: 29,000 jobs added, unemployment rate ticked higher to 4.2%. Phelan views this as 'pretty good' given labor force participation increases, noting the need for ~40,000 jobs/month to maintain the unemployment rate.
• AI's impact on the job market: Phelan states AI has not shown up as a job killer; companies using AI are hiring more people, similar to past automation leading to new job classes.
• AI investment and inflation: Phelan believes the massive AI investment boom is not inflationary and is crucial for US national security and manufacturing growth.
• Federal Reserve policy: Phelan maintains that the Fed's rate hikes were a mistake, pointing to recent PCE data (core PCE at 2%, headline at 1% annualized over three months) as evidence that inflation is already coming down.

Council of Economic Advisers Chairman Christopher Phelan discusses the September jobs report, stating it was better than it looked due to increased labor force participation. He argues that AI is not a job killer and its investment boom is not inflationary, emphasizing the importance of US leadership in technology. Phelan reiterates his view that the Fed's rate hikes were a mistake, citing cooling inflation data.