On Friday’s broadcast of Bloomberg’s “Balance of Power,” White House Council of Economic Advisers Chairman Jared Bernstein responded to the August jobs report by stating that “the market has an overreaction function. Today’s a pretty simple story, if you keep it down to its fundamentals, employment up, wages up, unemployment down, inflation down. Put that all together and it’s a recipe for continued growth, continued real gains, and I think an expansion that will persist.”
Bernstein said, “Right now, if you look at the underlying pace of job growth, it’s about where some folks put the breakeven level, meaning the number of payroll job gains that are sustainable and will keep the unemployment rate where it is or moving down. If you then turn to the overall economy and look at consumer spending, real wage gains, incomes up a couple thousand dollars over the past couple of years for the average family, then you start to see the kinds of forward motion dynamics that have propelled this expansion forward and made it the strongest among the G7. Look, today is a pretty simple story that, you know, they say the Fed has a reaction function and the market has an overreaction function. Today’s a pretty simple story, if you keep it down to its fundamentals, employment up, wages up, unemployment down, inflation down. Put that all together and it’s a recipe for continued growth, continued real gains, and I think an expansion that will persist.”
Bernstein also stated that the August jobs report might get revised up.
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