Jeff Horwich: It’s that special day each month when we digest the latest employment numbers from the Department of Labor. The economy added 80,000 non-farm jobs in June. The unemployment rate did not move, it’s still at 8.2 percent. Investors are disappointed. We’ll get to the numbers in a moment. First though, Alan Krueger, he’s chairman of Obama’s Council of Economic Advisers. Good morning.
Alan Krueger: Good morning, Jeff.
Horwich: I heard one economist this morning charitably describe the jobs numbers as ‘weird.’ At the least, you can’t be particularly happy about them.
Krueger: When the jobs numbers come in every month, I try to take a step back and look at the jobs report in the context of other information we are getting about the economy, longer run trends. We see that for the past 28 months, the private sector has added jobs, a total of over 4.4 million over that period, some months stronger than others. We would like to strengthen the pace of job growth, but I think that we see a picture of an economy that is healing from a very deep wound that was inflicted by the financial crisis and the severe recession that followed.
Horwich: I know that you want Congress to pick up the president’s jobs bill, but let’s just adopt the fairly safe presumption that congress is not likely to do much for you stimulus-wise. If that is the case, what kind of policy advice can you give the president right now?
Krueger: Well you might count me as an optimist, but I do hope that congress will do the right thing and take the steps that it can take to stimulate job growth. The president submitted the American Jobs Act with a number of proposals that independent economists have said would strengthen job growth.
Horwich: Well I hear you, but it’s not likely to happen. So, what is within the president’s purview at the moment in terms of action?
Krueger: Well first of all, sometimes congress does act in the interest of the American people. We’ve saw that with the student loan interest rates — a bill that the president is going to sign later today. But the president can also take actions on his own by making it easier for families to refinance their mortgages. And he has actively pursued his administrative authority, such as helping families to refinance. In fact, what he would like to do is to expand refinancing so that families can take advantage of lower interest rates, and we are now asking for more authority to help families to do more refinancing.
Horwich: So Mitt Romney has said this morning what you would expect in response to these numbers, that they are very disappointing. He also said something about the many Americans who are stuck in jobs below their skill level. And you were at the Aspen Ideas festival talking about almost the same thing — you called it a ‘middle class jobs deficit.’ Explain that for me.
Krueger: Well we have faced a jobs problem in the U.S. for a very long time period. One of the reasons why middle class families were under so much stress and needed to borrow so much in order to maintain their consumption, and then the recession that began at the end of 2007 made the middle class jobs deficit much, much worse. There’s a big deficit to fill in terms of jobs growth. That’s why I think it’s very important that we stay on the path of creating more jobs each month. As I mentioned, we’d like to do more to strengthen the pace of jobs growth.
Horwich: Alan Krueger, chairman of President Obama’s Council of Economic Advisers and professor of economics at Princeton, thanks very much.
Krueger: Thank you, Jeff.
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