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Harvard University Economics Professor Martin Feldstein on the outlook for the economy.
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Well a slight dip in weekly jobless claims are bringing a much needed piece of good economic data after a recent wave of mediocre report.
Martin Feldstein former chief economic advisor to President Reagan and current professor of economics at Harvard University says.
Some rough times are still ahead for the recovery he joins us now Fox Business exclusive ten define.
Rough times -- reform back into recession.
It could happen it could happen I wouldn't bet on that now but I must say the economy is a lot weaker.
And people seem to realize what you said was good news was there was a change of 1000.
You know several 100000 number so it really was flat from last week also numbers that sometimes they're very often revised upward -- rather than Deborah.
That this thing that I think bothers most people as it should is that folks who were in their prime years forty men men 45 to 54.
Are a lot of them are becoming permanently unemployed these are these are folks in their project and in the same with working women so is.
Is that of of great concern to you know.
It is I mean the -- -- that half the unemployed are out for six months or longer I think it's forty something percent but that doesn't count the ones that have stopped looking altogether.
If you put them in it would be more than.
More than half.
They're not necessarily gone permanently what they're gonna have a much harder time getting back in.
The of the -- -- -- under employed here in the United States -- the rate of unemployment is much higher for them that it is for the national average.
I don't people.
In their twenties who have sent out a 150 resonates they have grand ambitions in the beginning after graduating from colleges like UCLA.
And then they can't get anything on they finally get something it's at a lower pay than what they expected.
But they take it there's some people are saying I'm not gonna I'm not gonna take a lower paying job to Americans have to -- reassess their expectations.
Well again it is the cycle we're still in a very serious.
Downturn.
We we hit bottom a couple of years ago but you couldn't tell it by the labor market.
-- things will get better but I think the historic record is that people who come out of college in times like this when the unemployment rate is high.
Are gonna have permanently lower incomes.
Then somebody who comes out in good times and starts with a better job.
Our growth itself obviously this is this visit a terrible recovery if you can call -- recovery.
It it it pails in comparison to most recoveries that we've had since since the Great Depression.
Why is -- and how do we get it how -- we kick start the economy fails even more than people realize you know.
We had a fourth quarter GDP growth rate of 3% at the end of last year.
-- was strip out the inventory accumulation not all of which was desired by the firms that did it was a little over 1%.
If you looked at the first quarter we had a GDP growth rate of 2.2 percent most of that was just automobile behind catching up.
From the fact that last year cars weren't available so how -- we kick start to cut.
We need to change our our business tax rules we need to change the expectations.
That -- people have about future taxes.
That's gonna require.
Changing the entitlement programs in bringing the fiscal deficit on -- on a path of people can say oh okay now I know what's gonna happen.
One.
Little bright spot here in the jolts survey job openings labor trends etc.
it march US companies posted their highest number of job opening yeah.
Do you think that that portends maybe just a slight bit of increase in hiring for the next.
Nothing can I hope so.
But part of -- is that in the old days you laid off Joseph when the economy turned down and then.
A month or so later you brought him back now Joe's been gone for six months and you may have lost track and so.
It's a very different kind of situation so therefore they are.
Posting jobs.
It may also be what people fear that there's a mismatch of what is needed that kind of skills that are needed.
And what people coming out of college from.
The kind of skills they come out with so much of -- college education.
Is not at all career oriented.
People think that.
As long as I am have a BA.
Somebody's gonna hire me in a professional job doesn't work that way.
Particularly for BA's and anthropology but.
I -- they're giving way to wrap I have to ask him.
Breaking news for the first time since September 2008 we have a budget surplus a monthly budget surplus now don't get carried away pick up okay -- that what's your reaction to it.
Quickly nothing nothing I mean I we don't you know it.
For whatever reason people filed a little earlier than they otherwise would have.
Therefore -- some revenue came in sooner but the estimate for the year as a whole.
Is still going to be on the order of a trillion dollars Martin Feldstein professor of economics at Harvard thank you for joining -- -- good being with us.
