Senior White House economists on Sunday predicted the U.S. economy will start creating jobs by spring and said that boosting employment will be at the top of President Barack Obama’s agenda next year.
Growing public frustration with the still-sluggish economy and double-digit unemployment has weighed on Obama’s popularity and may put his fellow Democrats at risk in the 2010 congressional elections.
But Obama’s aides and many private economists were encouraged by a better-than-expected employment report for November that showed that the jobless rate inched down to 10 percent from October’s 10.2 percent.
“I believe that, as do most professional forecasters, that by spring, employment growth will start to be turning positive,” Lawrence Summers, director of the White House National Economic Council, said on ABC’s “This Week.”
In November, the pace of job losses slowed to 11,000 in November after a decline of 111,000 in October, marking a major improvement from the beginning of the year when the country was seeing jobs disappear at a rate of 700,000 a month.
Christina Romer, chairwoman of the White House Council of Economic Advisers, told NBC’s “Meet the Press” that there could be job increases in the first quarter of next year.
But Romer also said that even if payrolls begin to grow, the unemployment rate could go up again before it goes down as better prospects for employment attract more job seekers to the market.
Romer said the numbers “certainly do bounce around. I would anticipate some bumps in the road as we go ahead.”
DILEMMA OVER DEFICITS
Exploding U.S. budget deficits have created a dilemma for Obama, who is facing pressure from Democrats in Congress to back aggressive job-creation measures such as a big ramp-up in infrastructure spending and more aid to cash-strapped cities and states while at the same time trying to put some restraint on federal spending.
“For next year or two, priority number one — certainly this year — priority number one has be to job creation,” Summers told CNN.
Obama on Monday will meet with top executives from 12 major U.S. banks, including Citigroup, Goldman Sachs and J.P. Morgan Chase & Co. to talk to them about financial regulatory reform proposals and ways to increase lending to small businesses.
“He’s going to have a serious talk with the bankers,” Summers said on ABC. He added that the bankers “have obligations to the country” to restart lending after benefiting from the government’s $700 billion bailout of the financial industry.
While agreeing that job growth was lagging the recovery in the broader economy, Summers and Romer offered differing perspectives on whether the recession was over.
“Everybody agrees that the recession is over, and the question is what the pace of the expansion is going to be,” Summers said.
But Romer said that for many Americans, it feels as if the downturn is lingering.
She acknowledged that the United States may have turned the corner under the official definition of recession, because growth in gross domestic product has returned.
“But what the president has always said, and I firmly believe: you’re not recovered until all those people that want to work are back to work,” Romer said.
Senate Republican Leader Mitch McConnell seemed to lean toward Romer’s view, telling CBS’s “Face the Nation,” that the 10 percent of Americans without jobs don’t think the recession is over.