Former Reagan administration official Art Laffer said Friday that the latest jobs numbers painted “a disconcerting picture,” citing downward revisions from previous months.
The economy added 150,000 jobs in October, below the 180,000 economists expected, sending the unemployment rate up to 3.9%; job numbers for August and September were revised downward by a total of 101,000, part of a trend continuing through this year. “The revisions are huge this month, I guess the last two months they revised down a little over 100,000 jobs which is a major revision,” Laffer told “Kudlow” guest host David Asman.
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“The one thing I’m worried about, David, is the household survey versus the establishment survey. The household survey shows a very sharp drop in employment, and that’s very worrisome. There’s another little worrisome thing that wages, while they grew, they grew by less this month than they have over the past six or seven months,” Laffer added. “So wage growth is not catching up to these numbers dropping, and that’s where we are. When you talk about the deficit coming on of $1.6 trillion and more government jobs and all that, it is a disconcerting picture.”
The number of jobs at all levels of government reached nearly 22.9 million in 2023, 14.66 million of which were with local governments, while 5.28 million came from state government and the federal government accounted for nearly three million, according to data from the Bureau of Labor Statistics. Government jobs were second only to health care in the October jobs figures, which combined with hospitality and leisure to account for nearly all of the job gains.
Laffer also warned that interest rates could still go higher. “When we took office on January 20th, 1981, the prime interest rate in this wonderful country of ours was 21.5%, and I think the 10-year bond yield got over 10, so I would not bet the whole farm on interest rates never going up again,” Laffer told Asman. “I think that would be a mistake. They may not, but I think it would be a mistake betting against it.”
Harold Hutchison on November 3, 2023
