Former U.S. Treasury Secretary Lawrence Summers said the latest jobs report shows the economy is “on the right road” while Glenn Hubbard, an adviser to Republican presidential candidate Mitt Romney, said he’s skeptical about the meaning of the January numbers.
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Former U.S. Treasury Secretary Lawrence Summers. (Bloomberg) |
“Unlike many of the favorable past reports, if you look beneath the surface of this one almost every indicator within it is favorable,” Summers said Sunday on ABC’s “This Week,” where he appeared with Hubbard, dean of the Columbia Business School.
Employers added 243,000 jobs in January, the biggest gain in nine months, and the unemployment rate dropped to 8.3 percent from 8.5 percent in December, the Labor Department reported last week in Washington. The improvement exceeded the most optimistic forecasts in a Bloomberg News survey of economists.
Summers, director of the National Economic Council under Democratic President Barack Obama until last year, said the administration needs to build on the momentum of the easing unemployment.
Hubbard, who was chairman of the Council of Economic Advisers under Republican President George W. Bush, said the improved employment data was driven by a drop in the number of people who are looking for jobs while the rate of underemployment remains high. Administration policies have stood in the way of the recovery, he said.
“There needs to be a serious debate on what we can do in tax policy, in health care, in regulation and financial reform to actually create jobs,” Hubbard said.
Obama administration officials offered a guarded public response to the report last week, with nine months to go before the November election and the U.S. economy still vulnerable to risks such as a worsening of the European debt crisis.
Obama said that while too many people in the U.S. still don’t have jobs, the data show “the economy is growing stronger” and “the recovery is speeding up.” In remarks Feb. 3, Obama appealed to Congress to pass an extension of unemployment benefits and the payroll tax cut.
“Do not slow down the recovery that we’re on,” Obama said, directing his words at lawmakers. “Don’t muck it up.”
Romney, 64, said upon winning Nevada’s caucus Saturday that Obama didn’t deserve credit for January’s drop in the unemployment rate.
“Mr. President, we welcome any good news on the jobs front,” Romney said. “But it is thanks to the innovation of the American people in the private sector and not to you.”
Douglas Holtz-Eakin, president of the American Action Forum and former economic adviser to U.S. Republican Senator John McCain’s 2008 presidential bid, said Sunday that unemployment will go up before it comes down in a permanent way and the economy still needs steady job growth.
“We got one month’s good news in the labor market, that’s great, but the truth is the debt is bad and the recovery is not very strong, and we have a long way to go,” Holtz-Eakin said on CNN’s “State of the Union.”
Alice Rivlin, senior fellow at the Brookings Institution and former vice chairman of the Federal Reserve, said on CNN that she expects “good, slow recovery with gradual reduction in the unemployment rate.” (Bloomberg)
Rivlin said that as much as she’d like to see continued growth of GDP and employment, the key to the U.S. economy’s future is for congressional Republicans and Democrats to work with the president to address the country’s long-term debt.
“Gridlock is the greatest threat, much greater than anything else that could happen to our economy,” she said.
(Bloomberg)
