Austan Goolsbee: 'Stiff Headwinds' Slow Job Creation

PHOTO: Austan Goolsbee on TW
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Following a disappointing jobs report showing slowed growth on employment, President Obama's top economic advisor Austan Goolsbee said the administration is focusing on policies to improve conditions for the private sector to grow the economy.

"Our effort now as a government should be to get the private sector to help them stand up and lead the recovery," Goolsbee told "This Week" anchor Christiane Amanpour, citing efforts on regulatory review, while maintaining policies such as reduced payroll taxes through the end of the year. "We've got to rely on policies that are trying to leverage the private sector and give incentives to private sector to be doing the growth."

The monthly jobs report released on Friday showed that just 54,000 new jobs were created in May, the slowest month of hiring since last fall when the recovery began gaining traction.

The disappointing report was worse than economist expectations, as the unemployment rate ticked back up to 9.1 percent.

Goolsbee cautioned against reading too much into the report, saying "stiff headwinds" from shocks such as the disaster in Japan and higher gas prices impacted the employment picture in May.

Goolsbee maintained that "the trend is really clear" on positive job growth in recent months, when the economy added one million jobs in the private sector.

"Don't make too much of any one month's job report because they are highly variable," said Goolsbeenoting that the economy has improved dramatically from the picture two years ago. "After the last recession, in this comparable period, post-recession, we had lost 100,000 jobs. We've added more than two million jobs."

Despite the monthly numbers being below expectations, Goolsbee said that we are not in a jobless recovery.

"There's a major difference between a jobless recovery and a very deep hole that we are climbing our way out of," Goolsbee said. "And that is the position we're in."

"What we know is that we have moved a long way from when the economy is in a rescue mode, the private sector was in freefall and the government is only thing standing between us and falling into another great depression," he added.

Goolsbee added that he believes there will be resolution on raising the debt ceiling in the next month, which will also create greater certainty for the economy, saying that "the U.S. is a nation that pays its bills."

"I'm relatively optimistic because you've seen leaders on both sides of the aisle saying they don't want to push this all the way up until the edge of the Treasury's authority of what can be done," Goolsbee said. "This is not an alarm clock. It would be extremely dangerous to get right up to the edge."

While the debate in Washington in recent months has focused on reducing the deficit, Goolsbee said the White House remains focused on improving the employment picture.

"The president has never stopped talking about jobs," Goolsbee said. "For him, the growth strategy is the number one issue."

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