Council of Economic Advisers Blog
- Posted byon September 13, 2011 at 12:00 AM EDT
New data released today on income and poverty in 2010 underscore the need for Congress to pass the President’s American Jobs Act without delay. With the first full year of data following the deepest recession since the Great Depression now in, we see an unacceptably high poverty rate and families struggling to get by on less income.
- Posted byon September 2, 2011 at 9:39 AM EDT
Today’s employment report shows that private sector payrolls increased by 17,000 and overall payroll employment was flat in August. The unemployment rate remained unchanged at 9.1 percent, a level that remains unacceptably high. Despite a slowdown in economic growth from substantial headwinds experienced throughout the year, the economy has added private sector jobs for 18 straight months, for a total of 2.4 million jobs over that period.
Clearly, faster growth is needed to replace the jobs lost in the downturn. Today’s report underscores the President’s call for Congress to pass a clean extension of the transportation bill to keep workers on the job and keep critical highway construction, bridge repair, mass transit and other important projects moving forward. Next week, the President will lay out a series of additional bipartisan steps that Congress can take immediately to put more money in the paychecks of working and middle class families; to make it easier for small businesses to hire workers; to put construction crews to work rebuilding our nation’s infrastructure; and other measures that will help the economy grow while still reducing our deficit and getting our fiscal house in order.
Sectors with employment increases in August included health care and social assistance (+35,500) and professional and business services (+28,000). Sectors with employment declines included information (-48,000, which includes striking Verizon workers), construction (-5,000), and manufacturing (-3,000). Local government lost 20,000 jobs and has shed 398,000 jobs since February 2010. State government added 5,000 jobs as an estimated 22,000 furloughed Minnesota state workers returned to work.
- Posted byon August 29, 2011 at 12:17 PM EDT
This morning, President Obama announced his intention to nominate Alan B. Krueger as a member of the Council of Economic Advisers (CEA). As one of the nation’s leading economists, Dr. Krueger will bring decades of experience, including serving as chief economist at the Treasury Department, and a wealth of knowledge to the challenge of creating jobs and promoting economic growth. Following his confirmation, President Obama will designate Dr. Krueger as Chairman of CEA.
It’s going to take time to recover from a storm of this magnitude. The effects are still being felt across much of the country, including in New England and states like Vermont where there's been an enormous amount of flooding. So our response continues. But I’m going to make sure that FEMA and other agencies are doing everything in their power to help people on the ground.
Even as communities of the Eastern seaboard recover from the hurricane, the country as a whole continues to face the challenge of economic recovery. As the President said today, Dr. Krueger will be a strong addition to his economic team as they work tirelessly to accelerate hiring and spur innovation:
- Posted byon August 5, 2011 at 9:47 AM EDT
Today’s employment report shows that private sector payrolls increased by 154,000 in July and the unemployment rate ticked down to 9.1 percent. The economy has added 2.4 million private sector jobs over the past 17 months, despite a slowdown in economic growth from substantial headwinds in the first half of the year.
While the better than expected report is welcome news, the unemployment rate remains unacceptably high and faster growth is needed to replace the jobs lost in the downturn. Bipartisan action is needed to help the private sector and the economy grow – such as measures to extend both the payroll tax cut and unemployment insurance, as well as passing the pending free trade agreements with re-employment assistance for displaced workers, the patent reform bill, and a bipartisan infrastructure bill to help put Americans back to work. This week we averted an economic catastrophe by avoiding a default and putting in place an important down payment on long term deficit reduction. We will continue to work with Congress to build on these efforts to achieve a broader balanced deficit reduction agreement that instills confidence and allows us to live within our means without shortchanging future growth.
- Posted byon July 29, 2011 at 10:15 AM EDT
Today’s report shows that the economy posted the eighth straight quarter of positive growth, as real GDP (the total amount of goods and services produced in the country) grew, but at only a 1.3 percent annual rate in the second quarter of this year. The downward revision in the first quarter to 0.4 percent further reflects the slowdown of economic growth due to substantial headwinds faced in the first half of this year. Additionally, the annual revision to GDP showed that the Great Recession – the worst on record – was even deeper than originally estimated.
We are at a fragile moment in the world economy and cannot afford to do anything to undermine our recovery at a moment such as this. The unemployment rate is unacceptably high and faster growth is needed to replace the jobs lost in the downturn. This report underscores the need for bipartisan action to help the private sector and the economy grow – such as measures to extend the payroll tax cut and unemployment insurance, pass the pending free trade agreements with re-employment assistance for displaced workers, and create an infrastructure bank to help put Americans back to work. It also underscores the need to end the uncertainty surrounding the risk of default and put in place a balanced approach to deficit reduction that phases in budget cuts, instills confidence, and allows us to live within our means without shortchanging future growth.
Notable contributions to real GDP growth in the second quarter included net exports (0.6 percentage points) and fixed investment (0.7 p.p.). Defense spending added 0.4 p.p. to GDP, but this gain was offset by declines in state and local government (-0.4 p.p.) and nondefense spending (-0.2 p.p.). Consumer spending rose just 0.1 percent at an annual rate, with a steep decline (23 percent) in motor vehicle consumption accounting for the weakness. The downward revision to first quarter GDP from 1.9 percent to 0.4 percent reflects lower contributions from inventory investment and imports.
In this year’s annual GDP revision, the overall downward revision was concentrated at the end of 2008 and the beginning of 2009, so that growth in 2008:Q4 was revised to -8.9 percent from -6.8 percent and 2009:Q1 was revised to -6.7 percent from -4.9 percent. What was already the deepest reported recession since official quarterly estimates began in 1947 is now reported to have been significantly worse.
Austan Goolsbee is Chairman of the Council of Economic Advisers
- Posted byon July 28, 2011 at 2:09 PM EDT
It is one of the great American stories, repeated countless times over decades. An immigrant to the US, sitting in a lab or a company or even at home, working to start a company that ends up becoming a great American success story.
Some of our greatest companies began exactly this way. And immigrants today have great ideas that can change the world. The question is whether they will develop them in the United States or somewhere else. Our immigration system should be designed to encourage talented people to study in the United States and start companies here. But today, foreign students studying science and engineering at America’s top universities are actually discouraged from using the skills they learn to create American jobs and make our economy more competitive. The end result is that we end up training innovators and entrepreneurs for other countries. That makes no sense. Instead of showing these future entrepreneurs and scientists the door, we should be stapling a green card to their diplomas and providing Startup Visas to those with the best ideas.
Earlier this week, Senator Schumer hosted a Senate Subcommittee hearing on the “Economic Imperative for Enacting Immigration Reform”. A consistent theme among the hearing panelists, which included leaders from Microsoft and Nasdaq, was that reforming our high skill immigration policy is critical to creating American jobs and spurring economic growth.
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