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Former White House Council of Economic Advisors Chairman Ed Lazear on the outlook for the U.S. economy.
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Is not the only ones concerned about the state of US economy we have a former member of the Bush Administration says it is all starting to look like 2007.
All over again.
Here in a Fox Business exclusive is -- -- former chairman of the white house council of economic advisors.
I all right you cannot let Christine Lagarde that the state how it really is -- she corrected she read on some points where she wrong.
Well she certainly is talking about the direction the economy is moving right now.
Our growth over the past five quarters has been extremely -- about one and a half percent.
Historically growth should be about 3% so.
The problem is not only are we not recovering we're not getting back to where we should be but unfortunately the gap between.
Where we are right now and where we should be is widening rather than narrowing so.
Yeah I'd say she's she's got it about right on unhurt at least on her diagnosis on -- sure I would that go along with their in terms of her policy prescriptions that.
The diagnosis is when that I agree -- While you push the diagnosis even further in a June mid June editorial on Wall Street Journal you're right.
A recession begins when the economy peaks and begins to turn down now.
As we like is this recovery has been and then again it's one of the weakest -- we have ever had the United States.
Have we actually -- -- and are we beginning on that down slide toward recession.
Well we're pretty close.
Again you know this is something it -- is usually determined by a group called National Bureau of Economic Research they date will we have reached the peak.
You know this is not going to be much of the peak unfortunately but it is a peak in the sense that we did have some pretty strong positive growth for awhile back in 2010.
The last wave of the recession ended -- back then and now unfortunately it looks like we're in.
New territory where we're starting to slow again so.
That the big concern that I have been and you mentioned -- a little bit earlier in your show is that there are.
A number of data series that.
Point to some pretty significant slowdowns the one that I tend to look at.
More than mean monthly jobs report although obviously that's significant as well.
But there's another report -- is less known because it's relatively relatively recent series is called jolt stands for job openings and labor turnover survey.
And the nice thing about jolts -- it gives you data on the number of hires as well as the number of separations.
The scary thing in the most recent -- data is that the number of hires in our economy fell quite significantly last month.
And is now below the January 2009.
Level so that's not a good side.
We also like to mention that the jolts survey will -- for every ten people in the construction industry looking for a job there are only two jobs or three jobs that's what it really points out.
Obviously it has been a choppy pictures we just saw but you see that most recent drop.
Out does the previous drop in the the -- of where we find that that's very interesting that that's a piece of data you're looking at and it seems to be.
-- indicative of what's going on how -- Ed is it possible -- yes as we start to look -- we are falling backward slipping down that slippery slope on the backside of it back toward recession.
That some of that is perception about the European drama and trouble that's been happening and yet we tend at least looking at some of the earnings reports that we see from some companies.
Starting to look a little bit better.
-- well there are some positive numbers out there we saw what 1 this morning in terms of factory orders.
But on the whole I think what you want to do is you want to focus on trends.
You mentioned that you mentioned a couple of things one is a long term trend if we look at trends just in terms of the headline jobs numbers.
Remember back in January we had we added about 275000.
Jobs.
That's been steadily down downward trend and now we're looking at numbers that are around 70000.
The Europe point I think that you made is that it extremely important it's -- Europe is having an effect on us but it's.
It's -- -- we need to be very careful not to overstate it this is not an export driven economy doesn't mean that we don't depend on exports to some extent.
But we -- not Germany.
We -- an economy that survives right now primarily on what happens in the United States and so even if Europe were to slow dramatically.
And to go into a pretty significant recession that would that would Shirley okay -- act that basic.
Question add that if forgive me for directly but we're almost out of time that begs the question the -- The -- what didn't create this this anemic recovery and the bush beat the bush team is still -- of course by the administration -- many in the press.
As the reason why we haven't recovered fully how to respond to that.
Well I think I think that's just it -- a misreading of the data I mean look you know you might you might criticize the the old team for what happened back in 200720082009.
But it's three years later.
We had significant growth we were moving out of the recession the recession ended we never got to -- A good state that the recession ended now we're sinking back this is in a new wave of problems and I would argue that.
It's primarily a result of -- focus on short run policies rather than on long term economic growth the kinds of things that we need to do.
To improve economic the economic situation -- over the long run.
-- low inefficient taxes more trained.
Less burdensome regulation.
And and and and and I hit -- thinking about ways to create a positive rather than the negative business climate.
Analysts see your former chairman of the white house council of economic advisors happy holidays thank you for two cigarettes --
