Federal Reserve

Obama advisor: Check out 3.7% private sector growth

The economy is ending the year strong with "solid job growth," and the bipartisan budget agreement will help ease the drag on , Jason Furman, chairman of the Council of Economic Advisers, told CNBC's "Squawk Box" on Wednesday.

While ducking the question on what the Federal Reserve should do at its final policy meeting of the year, Furman did elaborate on what needs to be done to jump-start the economy.

"The immediate thing we need to do next is extend unemployment insurance benefits. I think that's actually good for the economy—the purchasing power of those workers," he said, adding that infrastructure, education and reforming the business tax code should be next up on the agenda for creating more jobs and growth.

"If you look at the private components of GDP, they've been growing at about a 3.7 percent rate over the past two quarters," Furman said. "I think that's a better guide to what we're going to see next year now that those fiscal headwinds are past us."

On Day 2 of their meeting Wednesday, Fed policymakers are wrestling with how to gauge the strength of the economy. The Fed will release its policy statement and economic projections at 2 p.m. EST, followed bywhat's likely to be Ben Bernanke's final news conference as chairman 30 minutes later. Bernanke is stepping down on Jan. 31 at the end of his second, four-year term. Janet Yellen, the Fed vice chair, is expected to be confirmed this week to succeed Bernanke and become the first woman to chair the central bank.

Investors want to know if the central bank will start scaling back its $85-billion-a-month quantitative easing bond-buying program after this meeting or whether they'll keep the guessing game going into the new year.

Data indicates Fed should taper: Pro
Data indicates Fed should taper: Pro

Peter Boockvar, chief market analyst at The Lindsey Group, handicapped the likelihood of a December taper on "Squawk Box" on Wednesday. "If it's based on the data, yes."

In the rosy November jobs report, the fell to 7 percent, while the economy created a better-than-expected 203,000 nonfarm jobs.

"Remember, a while back Bernanke said, 'QE would be done when we got to a 7 percent unemployment rate,'" Boockvar said.

"The bond market is ready for it," he said. "The at 2.85 percent is exactly where it was the day before they did not do anything in mid-September," a reference to the Fed's surprise decision not to start the taper that month. As for whether the stock market is ready for tapering, he said he's "not so sure."

Boockvar also sees a scenario under which the Fed won't act Wednesday: "If they're worried about the institutional transition of Bernanke to Yellen, they may just wait."

By CNBC's Matthew J. Belvedere. Follow him on Twitter @Matt_SquawkCNBC.