Looking For More Signs Of Economic Rebound

LINDA WERTHEIMER, host:

It's going to take a lot of good news to combat the effects of a recession that wiped out more than eight million American jobs. Still, a new batch of economic reports out this week looked pretty good.

The economy appears to have stopped shedding jobs, employers created jobs last month at the fastest pace in three years, although it was not enough to change the unemployment numbers. The economy is growing, but not at the faster rate we saw earlier in the year. Manufacturing jobs are still hard to find, but productivity is way up.

Today, we're going to try to sort out what all these news mean to the nation's recovery. I'm joined by Michael Mandel. He is the chief economist at Visible Economy LLC. And he joins us from our New York Bureau. Welcome to the program.

Mr. MICHEAL MANDEL (Chief Economist, Visible Economy LLC): Great to be here, Linda.

WERTHEIMER: So could you just break this down a little bit, what do you see on the good side of the economic recovery ledger and what do you see on the bad side? Let's start with the good news.

Mr. MANDEL: The good news, of course, is that the number of jobs in the private sector is finally increasing, as you say, not by an enormous amount but there's a big difference between falling and growing the private sector. And at 123,000 jobs in March, which is not an enormous number but it's not negative.

The second thing is that the housing market appears to have bottomed out across the country. Some places, prices are rising; some places, the prices are falling. We're no longer heading down off the cliff. And the third piece of good news is that the financial sector seems to be finally knitting itself back together again.

And if we look around the economy, one of the things that I look at is I look at the signs of industries that are actually have been adding jobs for a while, even though the rest of the economy has been weak. And what I see is I see there's been jobs that have been added in internet publishing, in Web search, in wireless telecom, in computer systems programming. And sometimes the new communication sector of the economy actually seems to have some mojo in it.

WERTHEIMER: And the jobs question. I mean, eight million people lost their jobs; 123,000 jobs when you put it up against eight million jobs lost in the recession, so much.

Mr. MANDEL: Well, you didn't ask me to get to the bad stuff.

WERTHEIMER: Okay.

Mr. MANDEL: So let me do the bad stuff.

WERTHEIMER: All right, let's hear the bad stuff.

Mr. MANDEL: First is enormous debts on the state and local level. So we're going to have a lot of job layoffs to come, yet, on the state and local level. The second thing is, is that there's a lot of debt floating around still in the private sector in terms of people with big mortgages, people with big credit card debts. And that's going to sort of impair growth for a long time to come.

And the third thing - which I think is really big - is that we're still running a humongous trade deficit even after all these cutbacks, even after people have pulled in their belts, and what that means is that we're still borrowing - the U.S. is still borrowing enormous sums from the rest of the world, which means that, you know, there's probably another crisis coming down the road, maybe not next week, maybe not next month, but a little bit further out.

WERTHEIMER: The president was in North Carolina yesterday, Michael Mandel, and he said that the economy seems to have turned the corner. Do you think that's right?

Mr. MANDEL: I think we've bounced off the bottom. What I'm seeing at this point is a two-track economy where most of the economy is going to sort of bounce along the bottom for a while, dragged down by debt, dragged down by the state and local government and that there may be sectors, including communications -there may be other sectors too - that actually get some strength, some hiring, some growth to it.

So, I don't see us at the beginning yet of a sustained strong recovery. But we have turned the corner from sliding down to maybe bouncing up a bit.

WERTHEIMER: What do you think the president's major project of the last few months, the health care bill, is that going to make any kind of an economic difference as it goes into effect?

Mr. MANDEL: Well, yeah. The fact is that health care sector has been a tremendous producer of jobs, not just now, but over the last 10 years really. If you look at the entire boom from 2000 to 2007, basically about three-quarters of new private sector jobs came out of health care and education. Just an amazing number.

And the health care sector has continued to produce jobs even during the downturn, so that's actually nothing new. We're going to be putting more money in - that will keep the job growth going - but frankly, an economy which is built purely on health care jobs is not going to be a good competitive economy. We need to produce jobs elsewhere.

And right at this point, the only place that those are going to come from is from new and innovative industries, and I'd like to see more support on that coming out of Washington.

WERTHEIMER: Michael Mandel is chief economist at Visible Economy LLC. He joined us from our New York bureau.

Michael Mandel, thank you.

Mr. MANDEL: Thank you.

Copyright © 2010 NPR. All rights reserved. Visit our website terms of use and permissions pages at www.npr.org for further information.

NPR transcripts are created on a rush deadline by an NPR contractor. This text may not be in its final form and may be updated or revised in the future. Accuracy and availability may vary. The authoritative record of NPR’s programming is the audio record.