Fmr. Obama Adviser Goolsbee: 'You Probably Are Going to See a Continuation of' 'Negative Real Wage Growth'

4 days ago

On Friday’s broadcast of CNBC’s “Squawk Box,” Economics Professor astatine the University of Chicago Booth School of Business Austan Goolsbee, who served arsenic Chairman of the Council of Economic Advisers nether President Barack Obama, praised the fig of jobs added successful July, but pointed retired that if GDP is declining astatine the aforesaid clip a ample fig of jobs are being added, “it has to mean that productivity’s going down,” and we volition apt “see a continuation of this benignant of antagonistic existent wage growth.”

Goolsbee said, “I mean, this is simply a jaw-dropping number. There has ne'er been a clip erstwhile we got the unemployment complaint down this low, wherever we’re adding 500,000 jobs. I mean, I thought that, fixed each of the complaint increases, that we would astir apt person a disappointment oregon a miss. You’re ne'er going to perceive maine knock a jobs fig wherever we got a half-a-million jobs. I would item determination are 2 areas of, not weakness, but danger. The archetypal is, if you’ve got GDP shrinking erstwhile you’re adding jobs astatine this benignant of rate, it has to mean that productivity’s going down, and if productivity’s going down, what that’s going to connote for wages is not great. And so, you astir apt are going to spot a continuation of this benignant of antagonistic existent wage growth. But the 2nd happening is this is fundamentally not stable. There are not capable radical to support adding 500,000 jobs a month. So, connected a beauteous accelerated order, that’s — it has to stop. We person to scope what is simply a de facto afloat employment, and past the numbers are not going to beryllium arsenic big. And so, radical can’t beryllium amazed erstwhile that happens.”

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