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Job Market Showing Signs of Improvement?

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    University of Chicago Professor Austan Goolsbee on the state of the job market.

  • Duration 6:54
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This transcript is automatically generated

So the big employment report is -- it's a 163000.

Jobs added in July the unemployment rate ticked up.

To eight point 3% and a 135000.

People left the workforce so mixed results me sharpen the market liked it as we said the Dow surging.

217.

Points there well above thirteen thousand.

Joining me now is off.

The university of Chicago's.

School a business and the former chairman of president Obama's council of economic advisors Austan welcome to the show thanks for coming on.

Thanks for having me so -- -- take on this data.

I thought overalls pretty solid you know you never wanna make too much and I said when the numbers are good or bad you'd ever want to make too much out of any one month.

The trend is more important than than any month because there's a lot of variability and that's especially true.

Of the unemployment rate survey.

Which is a different survey than than the jobs numbers survey.

In the unemployment rate.

It because of rounding it went up by 31 hundredths of a percent but that crossed.

Eight point 25 thresholds so that's why that looked like it take.

All think that side was fairly modest cost and I think my you can split from parent in the white house on the -- -- was trying to split that -- saying that the unemployment rate isn't really eight point 3% that it's.

Eight point 25 war -- it it makes it sound like -- -- to the rest of the country that there misery is sort of the white.

Houses rounding error.

I don't know that I agree with that -- I'm simply -- noting that the unemployment rate rose from.

8222825.

And there's a lot of variability in the unemployment rate survey.

You don't want -- conclude.

Overly positive.

From the strong payroll survey it was double expectations it's a solid month but it's just one month you know we've -- had.

Several months in a row that were good and and -- we started putting up numbers like out on a consistent basis I would caution people to get overly optimistic.

Absolutely a minute I'm not sure that putting up numbers like this on a consistent basis would really get us anywhere I mean you need a 125000.

Jobs every single month -- I don't wanna -- mean.

Growth in population yeah that's obsolete term.

-- I don't I don't agree with the I believe that on average you need about a hundred intend to a 125000.

To keep up with population that's -- and if you look at the end of last year and the beginning of this year when we were.

Growing in a 16880000.

A month range you saw the unemployment rate come down at a fairly.

Progressive clip.

Where we are.

Ironically.

Is where.

-- in the fall of 2009.

The CA may -- official government forecast.

That the unemployment rate in the fall of 2012 would be.

Eight point 2%.

And so I think we're kept moving along on a slow steady.

Process that we wish that growth rate could get up higher so that you can get more -- -- good job creation -- -- -- I think that's absolutely true that we agree we all agree that we wish the Joseph job growth rate was stronger and if you look back.

In July 1984 for example during the Reagan recovery -- we really -- U shaped recovery and not month for example.

We added 3121000.

Jobs and we we -- adding at a much stronger clip and you know as an economist.

That generally when you come out of a very deep recession like -- you see -- V shape recovery.

A very strong bounce back with time we have been really care about is that that's the statistical -- this is the abnormality -- what do you think -- flattening out.

Now in the yes in the normal deep recession.

An economy can go back to doing exactly what it was doing before the recession began and in any deep recession like that.

You get a rapid recovery.

This time what we were doing before the recession began was investing in housing stock and consuming more than our income.

Those were both driven by bubbles and we can't go back to doing what we were doing before so -- that -- it's a long process.

Actually I agree with you on that -- if you look at the numbers you know one of the industries were really hurting or not seeing comeback is construction jobs we lost another thousand.

Yeah what do we do to we're pleased that industry because it seems like like you sad.

We're not gonna go back to building houses the same clip.

Because people don't feel like we're gonna see you this it's not the same investment you're not gonna see the -- appreciation.

It's just not gonna happen those jobs have gone away how to we retrain those people to do something else are or what do we do about.

You know that that's the key you you're highlighting the key point that we're facing in this in this recovery we've.

Even though our growth rate is projected to be a little over 2% to -- -- percent.

And that seems modest that's the fastest growth rate of all the advanced countries of the world so we're not given any support from outside our borders.

They construction industry is probably even.

It with a turnaround of the housing market is not going back to the go go days of the two thousands.

So they've got to be retrained into other industry -- that has taken time and will continue to I think manufacturing.

Has been a relative bright spot even at a pretty weak job market out last two year -- two of the best.

Is not getting him all the way down while I mean as you know it an eight point 3% is -- or eight point 2549873.

Is is -- number.

No matter how you slice and politically it's top.

You know because as we all know that there isn't a great track record in this country for re electing someone.

When the unemployment rate is above 8% do you think that it's going to get lower significantly before the election and -- think the president deals with that.

I don't think it's gonna get much lower.

I mean it's possible what I don't foresee big changes either way like I say the most of the forecast for several years have been that it would be around where it is now.

There there are no observations.

Of unemployment rates above 8% so while it's true no one's been reelected.

Nobody been voted out of office with the unemployment rate above 8% either because.

This was a highly unusual.

Recession.

That the president steps -- -- mean -- there's no question about that.

I think if you compare.

Growth in the United States over the last couple years as the recession has ended and we're trying to pull out of it.

It's actually been significantly more impressive in the US that it has an almost any of the other advanced countries -- why it's hard to.

To reconcile I don't it's clearly not helping the president's yeah in this circumstance but yeah in some sense that might already be factored into the polls.

Down one point 5% we're better than Greece I don't know if that's campaign slogan but.

-- you are good sport -- coming on tonight we appreciate your time.

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