Alan Krueger at top economic adviser at the White House will leave his Cabinet post to teach again at Princeton University this fall.
Krueger, who has been chairman of the Council of Economic Advisers (CEA) since November 2011, has seen the economy and labor market through its gradual improvement — unemployment was 8.6 percent when he took the job and it had fallen to 7.5 in April.
"Alan was the driving force behind many of the economic policies that I have proposed that will grow our economy and create middle-class jobs," President Obama said in a statement on Tuesday.
"He’s devoted his entire career to making sure our economy works for everyone, not just those at the very top," he said.
"And while we have more work to do, today our economy is improving, thanks, in no small part, to Alan’s efforts."
Krueger, whose job is keeping Obama abreast of economic data, is the White House's face of the closely watched monthly jobs report.
He is returning to Princeton where he is a tenured economics professor.
There is talk that Obama will nominate Jason Furman who has been the assistant to the president for economic policy and the principal deputy director on the National Economic Council since Obama took office in 2009.
But no announcement on Krueger's replacement was forthcoming on Monday evening.
Furman has sounded the warning bell on the short- and long-term effects of arbitrary across-the-board spending cuts on the economy.
Anyone nominated to replace Krueger would go through the Senate confirmation process.
The CEA chairmen have a habit of returning to the academic world.
Christina Romer returned to the University of California at Berkeley in 2010 and Austan Goolsbee went back to the University of Chicago in 2011.