Friday’s job report said that the economy added 157,000 jobs and that unemployment ticked up to 7.9% from 7.8%. But how is the really economy doing? The Cycle brought in Senior Fellow Center on Budget & Policy Priorities Jared Bernstein and Professor at Smith School of Business Peter Morici.
The economy “could be doing a lot better, but it is certainly not falling apart,” said Morici.
The biggest surprise actually came earlier this week when the gross domestic product fell for the last quarter of 2012, the first time a decline has happened since 2009. “I think once we get revised numbers we are going to find out the economy is growing, as Peter suggested, too slow,” said Bernstein. “These are quarterly changes and they can be very volatile. I like to look at the year-over-year changes in cases like this. And if you do that, then GDP is growing at 1.5% now; that is just about fast enough to keep the unemployment rate where it is. And that is just what we are looking at, we are stuck in this 8% range on the unemployment rate and that is too high.”
Recent job numbers have later been revised upwards. But, said Morici, “even if we accept the revisions and be joyful about them, they are indicating that we are creating jobs at about half the pace that we need to, say, bring the unemployment rate down to 6% over, say, three years. So it is consistent with a weak economy.”
Morici said, “I am glad we have 30,000 or so jobs a month but it’s hardly enough.”