Joining me now is Kevin Hassett, Director of the National Economic Council. Thank you so much for joining us this afternoon. We really appreciate it. Well, it's great to have you. I do want to start off with your reaction to the August jobs report. As you know, just 22,000 jobs were created last month and revisions showed the U.S. actually lost jobs in June. That's the first month of job losses since the pandemic. Is this a warning sign about the state of the labor market?
Well, right now, when we're looking at all of the indicators, it's looking like things are running very smoothly and that the economy is on the way up. We've got industrial production at an all-time high. We've got capital spending up 9% over the first half of the year. We've got the Atlanta Fed's GDP Now saying 3%. And so when you see low jobs numbers like this, you kind of wonder what's going on. It's a little bit discordant with everything else that we see in the picture. Now, Goldman Sachs put out a report yesterday that I found kind of interesting. It showed that the BLS has seasonal problems in August, and that they tend to revise the number for this August up over the last 15 years by almost 70,000 jobs. And so if that were to happen again, then sort of all the indicators would make sense. But right now it does look like a weak number.
Well, in 2024, BLS actually revised numbers lower to 78,000 from 142,000. So it could go in the opposite direction as well. There's no guarantee, right.
Except that the average over 15 years is way north of 60,000 up. And so it's one of those things, right? When you're an economist and you watch people come and go, that because the school year starts and that when the school year starts could move from September to August and so on, it's a very, very difficult time for data people to adjust things for the seasonal factors.
Let me ask you about something that Mark Zandi of Moody's is saying. He is saying that the economy is on the brink of a recession by the end of the year. Do you think that's accurate when you look at these numbers?
Yeah, I absolutely do not. You know, I'm old friends with Mark Zandi. I have high regard for him. But I don't think that there's anything like a recession in the data. Again, the best measure of the overall economy is GDP. And the last number for GDP for the second quarter we got was revised up to 3.3%. And the Atlanta Fed saying it's 3%. Now a 3% growth number is so strong that you might recall that when I was back here in 2017 as Chairman of President Trump's Council of Economic Advisers, when we called for 3% growth, people called us charlatans and things like that, right? So a 3% number is a very strong number. Right now, the numbers that we can see are at 3%. And so I don't see any sign of recession. But I do have to concede that the jobs numbers are lower than make sense given everything else that's going on and that the futures markets right now are expecting the Federal Reserve to cut rates. And I think that, you know, if they had done that a little bit earlier, we'd probably be seeing stronger jobs numbers right now.
Well, let's talk about some of the other numbers that we're seeing. President Trump has argued his tariffs would create manufacturing jobs. But the data shows that the U.S. actually lost 12,000 manufacturing jobs last month, 33,000 manufacturing jobs since January. Why is the country shedding manufacturing jobs under President Trump on his watch?
Right. Well, what's happening right is that we're seeing a massive explosion in factory investment and in capital spending. And again, the jobs numbers right now are inconsistent with those. And we'll just have to see in the end. We're getting a really big benchmark revision of the jobs numbers next week. And we really need to start to see the jobs numbers make more sense. It's one reason why we're looking for a new set of eyes at the Bureau of Labor Statistics, because they keep revising things all over the place. As you might recall, last year they revised the number down by a million jobs over over a year. And that kind of error is really unacceptable for policy makers. If you're at the Fed, you know, having a million fewer jobs would certainly have affected your policy. And if you're a fiscal policy person, if you're making errors that big, if you knew that you had 1 million fewer jobs, you might have taken a different path with fiscal policy as well.
It is important to point out that this is not one person making a decision. It's a team of people poring through the data. They give the findings to the BLS commissioner. You take me to my next point, though. The president fired the BLS commissioner hours after the agency put out the July jobs report. He called those numbers, of course, rigged. So I have to ask you, does the president have faith in these numbers in this latest report?
I think that the president has called on new management there to make sure the numbers do a better job. Let's think about it this way, Krista. When's the last time you got a survey in the mail? And then you took it out, you opened it up and you filled it out, and then you brought it to the post office to return it. This is how these surveys, these old-fashioned surveys are still being done. And there's a more modern online place called Homebase, which has the jobs number in August at 150,000. And so the point is that we've got to modernize the way we collect our data, because it's so important that it be transparent and accurate. And these really, really massive revisions to the data are harmful to the American economy because people who steer the economy rely on those jobs to be true. And yet to be true.
Well, and yet when President Trump has liked the jobs numbers, he's touted them. In March, he said the numbers were much better, as you know, than projected by the media. In April, he said, in three months, we've created 350,000 jobs. Think of that. In June, he said, a lot of jobs are being created. That's what happened this morning. You saw the jobs. So does he only accept the numbers when it's numbers that he likes?
No. I think that everybody, increasingly even market participants, is become more aware of the design problems that the BLS right now. And that's why we brought new people in to make sure that we fix the problem and that the numbers are more trustworthy for everybody on the left and people on the right.
