Former Minister of Finance Lawrence Sommer said that on Friday Task of the Fed inflation is getting closer to being contained and also mentioned an important upcoming macroeconomic indicator to monitor.

What happened: The good part of the news is that there has been some wage restraint, Summers said in an interview with Bloomberg. At the same time, one must beware of false dawns, he warned.

Inflation is running at the 6% level was seen as a step in the right direction, but it’s still unimaginably high compared to two to three years ago, Summers said. He added that he maintained his view that a recession was more likely than unlikely this year.

“But when you look at some of these trends, you certainly have to think that the Fed’s work on disinflation is and feels much, much closer to completion than it was a few months ago.” , Summers said . The more optimistic possibilities, which he disagrees with, look more plausible today than they did a few months ago, he added.

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On DataWatch: Summers said the data should be watched “very, very” closely. He pointed out that Labor Cost Index data, due on the last day of the month, is a “gold standard measure” of labor costs and wage pressures.

“And that’s a number that they’re going to study very, very closely at the Fed and I suspect on Wall Street,” Summers said. “And I’m definitely going to get up early this morning to get that number right after.”

When asked if the Fed was at least talking about a pause, Summers said, “We’re not quite there yet.” A pause in February is inadvisable and a final decision doesn’t need to be made beyond February, he said.

“Again, I think the most important thing is to make sure that the job of containing inflation gets done and that they maintain their credibility,” said the former chief financial officer.

“So I think it’s a bit premature to think about a break at this point, but we’re…