While other economic indicators remain positive, the number of new jobs created in September was the lowest in almost a year and much fewer than predicted. Two former Labor Department chief economists decipher the mixed signals and the health of the overall economy.
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Reading the economic tea leaves is famously difficult, and what looks good on Main Street can go down poorly on Wall Street, and vice versa.
Today's jobs report sent several signals for experts to mull over. The number of jobs created last month was the lowest in almost a year and well below what economists were projecting.
But the report also contained some revisions of note: There were 60,000 more jobs created in August than initially counted. And in a major revision of annual data, the government said that 810,000 more jobs were created between March 2005 and 2006 than originally thought.
Two former Labor Department chief economists offer their takes on the numbers. William Rodgers had the job during the Clinton administration from 2000 to 2001. He's now a professor of economics at Rutgers University. Diana Furchtgott-Roth was with the Bush administration from 2003 to 2005. She's now director of the Center for Employment Policy at the Hudson Institute.
William Rodgers, I'll start with you. What do you see in today's job numbers, in terms of job growth?
WILLIAM RODGERS, Former Chief Economist, Labor Department:
Well, as you said, the number of new jobs over this last month came in well below what private-sector forecasters had anticipated, but also, Richard Friedman, my colleague from Harvard and I, we've been studying this labor market since the beginning of the recovery, as defined by the National Bureau of Economic Research, a nonpartisan think-tank out of Cambridge, Massachusetts.
And where they define the beginning of the recovery is November 2001. And when you do that, what you find is that we've only been averaging a little around 100,000 new jobs per month, clearly not enough to be able to absorb those people who have lost their jobs over the recovery.
Or in this past month, where we saw the unemployment rate stay still, but what happened was, people were leaving the labor force because they were having difficulty finding jobs. Again, we need to have 150,000 new jobs, roughly, just to keep our heads above water.
And also, we need to be well above that to be able to absorb young minorities, young people who have graduated from college. And so, again, this report didn't surprise me, because it's consistent with the trends that we've seen since the beginning of this recovery.
And now my colleague from the Hudson Institute, she's going to want to start writing history as beginning in January 2003, the beginning of the tax cuts. And even if you do that, you're still looking at an average job growth per month of about 118,000 new jobs per month, again, well below what we need to really extend opportunity broadly throughout this society.