White House Economist Warns Of Volatile Employment Numbers

Alan Krueger went right to work Friday as the official Chairman of President Obama’s Council of Economic Advisers, reminding Americans not to read to much into the latest employment figures. 

Krueger, whose nomination was unanimously confirmed by the Senate late Thursday night, said in a statement that, although new government data shows that the economy continues to grow, he remains wary the slow pace of recovery is keeping Americans out of work. 

“Despite adverse shocks that have created headwinds for economic growth, the economy has added private sector jobs for 20 straight months,” the statement read. “We need faster economic growth to put more Americans back to work.”

The 80,000 jobs added to the market in October is significantly lower than economists previously predicted. Most notably, the construction sector lost 20,000 jobs, a market Krueger said could have been remedied with the infrastructure bill that was rejected in the Senate earlier this week.

“The report underscores that one area that remains notably weak is the construction sector,” Krueger said. “That’s why it is disappointing that the Senate was not abele to proceed to the infrastructure part of the American Jobs Act.”

Though the nation’s jobless rate fell by a slim margin from 9.1 to 9 percent and the economy added 80,000 jobs, Krueger was adamant in reminding people that monthly figures can be subject to change. Initially, August’s report indicated that the economy added zero jobs. According to Krueger, the number of jobs added in August skyrocketed to 104,000 following a series of revisions. 

“The monthly employment and unemployment numbers are volatile and employment estimates are subject to substantial revision,” Krueger said. “This illustrates why the Administration always stresses it is important not to read too much into any one monthly report.”

Obama To Appoint Goolsbee As CEA Chair

President Barack Obama has selected one of his longtime economic advisers, Austan Goolsbee, to replace Christina Romer as Chair of the Council of Economic Advisers, according to a White House official.

Romer recently stepped down amid a withering economy with plans to return to California to be with her son as he starts high school this fall. She is expected to take a teaching position at the University of California at Berkely. 

Her replacement, Austan Goolsbee, a University of Chicago professor of economics, has been serving as staff director of the President’s Economic Recovery Advisory Board, a new Obama administration advisory committee, since Obama took office. Goolsbee also served as Obama’s senior economic adviser during the 2008 presidential campaign but slid under the radar after he reportedly told Canadian officials Obama’s stance on trade was ‘political positioning’. He disputed the allegations and later resurfaced in a series of debates with Sen. John McCain’s (R-Ariz.) economic adviser, Douglas Holtz-Eakin.

Additionally, because the 41-year-old Goolsbee was confirmed by the Senate as a member of the Council of Economic Advisers, he does not need a second confirmation to ascend as chairman. 

President Obama is expected to make his appointment public this morning at a news conference from the White House.

Top White House Economic Adviser Says Unemployment Likely To Stay Elevated

Travis Martinez - University of New Mexico/ Talk Radio News Service

White House Council of Economic Advisers Chair Christina Romer testified before a joint economic committee Thursday that although the nation's economy is moving into “recovery phase,” it is likely that the overall unemployment rate will remain painfully weak through 2010.

“As we [U.S. economy] enter the fourth quarter with the unemployment nearing 10 percent, it is likely to remain severely elevated,” said Romer.

Committee Chairwoman Carolyn Maloney (D-N.Y.) expressed deep concerns for the future of jobs and the labor market. During her opening statement, Maloney said that she can see signs of recovery, but it's contributing little to no help for the labor market.

“I am deeply concerned about the state of our labor market, as I have been since the start of this recession. GDP growth is of little comfort to the millions who have lost their jobs,” she said.

Romer reminded the committee that analysts have predicted that the Recovery Act will have its greatest impact on economic growth in the second and third quarters of this year. By mid-2010, she explained, fiscal stimulus will likely be contributing little to growth. However, Romer said she believes that the country has survived the low point of the recession, adding that there is concise evidence that the policies implemented by the Obama administration are working.

“If GDP growth for the third quarter is indeed positive, as anticipated, this would be strong evidence that the economic recovery is underway,” said Romer.