[Former Federal Reserve Economist: Economic Data May Be Distorted, Fed Could Misjudge the Situation] BlockBeats News, August 3 – Former Federal Reserve economist and creator of the Sahm Rule, Claudia Sahm, stated that if the Federal Reserve continues to overlook grassroots economic signals, it may misjudge the economic situation due to distorted macroeconomic data. Sahm pointed out that the current "resilience" reflected in U.S. consumer data does not stem from an increase in household wealth but rather from families taking on more debt and lowering consumption standards to maintain their livelihoods. The Federal Reserve's latest Beige Book indicates that nearly half of the regional Federal Reserve banks observed consumers relying on credit cards, small loans, and other means to cover daily expenses. At the same time, grassroots consumer pressure continues to intensify. In some regions, consumers are cutting back on high-priced food items due to high costs, and the demand for food assistance from charitable organizations has even surpassed levels seen during the financial crisis and the pandemic. Regarding the labor market, Sahm noted a disconnect between the official low unemployment rate and workers' actual experiences. Federal Reserve interviews reveal that some workers describe the current employment environment as "survival" rather than "stability." Due to concerns about economic uncertainty, employees are less willing to switch jobs, opting to stay even when faced with stagnant wages. Sahm warned that although grassroots economic pressures are mounting, some businesses are beginning to proactively raise wages due to rising living costs for employees, which could reignite inflation risks. She believes that as a data-driven institution, the Federal Reserve should not rely solely on macroeconomic statistics but must also pay attention to the real perceptions of ordinary households regarding prices and employment. Otherwise, it risks missing critical signals of economic change. [Original Link]