A panel of economic analysts disusses recent reports on the nation's economy and unemployment, which paint a mixed picture about the country's financial health.
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Margaret Warner has the economy story.
Today's new job growth report adds another layer to this week's mixed economic picture. The closely watched barometer of economic health showed a surprisingly strong gain of 166,000 new jobs last month. It followed Wednesday's Commerce Department report that the economy expanded in the third quarter at an annual rate of 3.9 percent, faster than expected.
Yet despite a mid-week Federal Reserve interest rate cut, the stock market — after dropping nearly 370 points yesterday — didn't regain much today. And the price of oil closed today at another near-record high of nearly $96 a barrel.
To help us understand all this, we turn to Nariman Behravesh, chief economist with Global Insight, an economic forecasting firm in Boston, and Nick Perna, managing director of Perna Associates, an economic analysis consulting firm in Stamford, Connecticut.
And welcome, gentlemen, to both of you.
So, Nick Perna, what do these two pieces of good economic news, in jobs and in economic growth, mean about where we really are right now?
NICK PERNA, Perna Associates:
Well, Margaret, it says that we're doing a bit better or considerably better than many of us thought at this juncture. It's hard to dismiss the job numbers; they look pretty good. The GDP was considerably larger than most forecasters were expecting.
But I think the real question at this point is, where are we headed? We come from a little firmer footing, but, you know, you mentioned $96-a-barrel oil. We've got all kinds of issues in the financial sector. And I think that, while this makes us a little more confident and a little more upbeat, we still have a lot of issues that are ahead of us that could slow the economy significantly.
Nariman Behravesh, first explain why these numbers were surprising. Is it because of the subprime housing and credit crunch?
NARIMAN BEHRAVESH, Global Insight:
Well, it's clear that the U.S. housing sector is in its worst recession in about 30 years, and there have been worries that it's been spreading to other parts of the economy. So the worry here is that, in fact, we are headed into, at a minimum, a weak patch, a soft patch, if you will, and in a worst-case scenario into a recession.
So the good news, as Nick was saying, is that, in fact, the economy does have a lot of momentum. But I agree with him that this kind of may be the last hurrah of the economy before we enter into a period in which growth could be only 1.5 percent or something like that.
So I think this may be sort of the momentum that we've seen, but it's going to be slowing down, as I said, heading into a period of, at best, maybe 1.5 percent growth.