Key Economic Questions Are Unresolved
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Later this week, on Friday morning just before 8:30 Eastern Time, investors, traders, and many economists around the world will stop what they're doing and tune in to hear the answer to the big question facing the economy right now. That's when the Labor Department tells us how many jobs were gained or lost across the country in March. Recent months have seen stronger job growth, but there's been a lot of concern in recent weeks over whether that can last. NPR's Chris Arnold reports.
CHRIS ARNOLD, BYLINE: Ben Bernanke, the chairman of the Federal Reserve, has been making people nervous lately. Last week at a big economics conference in Washington, Bernanke said yes, the unemployment rate has been falling recently and that's good, but...
BEN BERNANKE: At the same time some key questions are unresolved. For example, the better jobs numbers seem somewhat out of sync with the overall pace of economic expansion.
ARNOLD: In other words, overall economic growth may be slowing. So the worry is that these more solid job gains could disappear. More than once recently Bernanke has said this...
BERNANKE: Despite the recent improvement, the job market remains far from normal.
ARNOLD: The unemployment rate has fallen to 8.3 percent. For that decline to continue, though, Bernanke says it will likely need to have faster growth. And that's what many analysts and economists are thinking about right now. Gus Faucher is an economist with PNC Financial Services Group.
GUS FAUCHER: Yeah, that is the big question. It appears that GDP growth has weakened a bit in the first quarter.
ARNOLD: So that might mean that this next jobs report could be a big disappointment. Still, some analysts are optimistic. John Ryding is the chief economist of RDQ Economics in New York.
JOHN RYDING: Well, I think Chairman Bernanke has been playing down a little bit the performance of the economy because he wants to keep interest rates on hold through late 2014 in an attempt to try and further encourage growth. Our own view is the economy has been doing fundamentally a bit better than that.
ARNOLD: Ryding says some alternative measures of growth suggest a more robust recovery. Also, consumer confidence has been improving. On Friday the Commerce Department reported the biggest gain in consumer spending since July.
RYDING: So it may be the drop in unemployment has been more fundamental and maybe it will be continued at a faster pace than the Federal Reserve is currently anticipating.
ARNOLD: The economy needs to gain upwards of 200,000 jobs every month to make much headway against unemployment. We'll get that latest monthly number on Friday.
RYDING: And I expect to see job creation once again in excess of 200,000. And that will be very encouraging for the economy.
ARNOLD: Of course that's a prediction. We'll have to wait a few more days to find out.
Chris Arnold, NPR News.
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