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Treasury Economist: Unemployment Numbers Disappointing But Not Unexpected (RTTNews) - Obama Administration officials sought Friday to highlight hopeful economic signs in the face of unemployment figures showing 10.2 percent of Americans out of work. Treasury Chief Economist and Assistant Secretary for Economic Policy Alan Krueger said that although the overall unemployment rate was "disappointing," it had not come as a surprise. "The numbers are not altogether unexpected," he said. "The private consensus predicted the unemployment rate would be 10 percent at the end of this year and, indeed, that Administration's Mid-Session Review forecast was that the unemployment rate would average 10 percent in this quarter." Krueger also noted that the rate at which the economy has been shedding jobs was decreasing. "The October decline in payrolls is about 30,000 less than the Q3 average," Krueger said. "But we will not be satisfied until ? job growth is also positive." He added, "As I have said in previous months, less bad is not good enough." Krueger also pointed to an increase in the automotive sector and parts manufactures of 4,600 jobs as well as an unchanged public sector as benefitting from government support. "The temporary help services industry, often seen as a leading indicator for labor demand, added 33,700 jobs in October," he said. "The October jobs report comes amidst signs that the economy is recovering. Last week we learned that real GDP grew 3.5 percent in Q3, the largest increase in two years. Importantly, the growth in GDP was widespread across major components." He added, "Even excluding autos, housing, and federal spending, the economy grew last quarter, and the trend over the past few quarters is in a favorable direction." However Krueger noted that employment generally tends to lag behind growth in the economy and said the administration economic team was continuing to explore options to boost job growth. "Lowering unemployment will require a period of sustained growth," he said. "That is what the policies of this Administration are designed to create and that is what we've started to see." He added, "Creating jobs will require an effort across many fronts. ? We are looking at ideas such as additional investments in our aging infrastructure, tax cuts to encourage businesses to create jobs, steps to increase the flow of credit to small businesses, and an aggressive agenda to promote exports and help American manufacturers sell their products around the world." Krueger also noted that while economics as a science is often subject to differing interpretations, in this case the laws of economics are united, GDP needs to grow in a sustained fashion before the economy will begin to add jobs. "I don't say this often [but] in this case the laws of economics are a bit like the laws of physics," he said. "It's very important to maintain the economic growth that we've seen because economic growth is critical for job growth." |
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