The U.S. unemployment rate fell to 6.7% in November. Joseph LaVorgna, Special Assistant To The President & Chief Economist of the National economic Council joins Yahoo Finance Live to discuss how Friday’s jobs report are impacting markets.
- Shifting back over to that jobs report. Of course, this is being digested today by investors, as we see a weaker than expected additions in terms of employment for the month of November. Want to head to the White House to get the reaction there on the ground with Joseph LaVorgna, special assistant to the president and chief economist of the National Economic Council.
Mr. Lavorgna, Thanks for taking the time here to chat. Just first up, White House reaction to the numbers we got today, obviously coming in weaker than expected. Some things to point to there if you want to celebrate the improvement on the unemployment rate. What's the White House reaction to the discussions you're having there as you approach this here from the White House lawn?
JOSEPH LAVORGNA: So the unemployment rate is a big deal. It fell to 6, 7-- that's down 54% from where it was back in the-- back in April, which is a stunning decline. And we're seeing unemployment really, all the various ethnic groups-- men, women Asian-Americans, Hispanic-Americans, African-Americans all seeing lower unemployment. That's very good. And also, what goes into that calculation is private employment on the household survey. That was up almost 500,000, having been up about 2 million the month before.
So you are correct that the overall payroll number was a bit of a disappointment, and that might probably be related to some of the closures that took place during the employment survey week. But there's a lot of good news below the surface. And the economy looks pretty healthy, as per the Atlanta Fed's estimate of 11% GDP growth this quarter. So things still look pretty good, and we're still pretty optimistic. And we believe that what's happened over the past handful of months has been that our policies that were put in place prior to the pandemic have allowed us to recover much faster than virtually every private sector forecast, or even some of the official forecasters such as those from the CBO and the Federal Reserve, had anticipated.
- Even with some of those policies you highlighted, I mean, this is still a significant drop off if you're talking about 245,000 jobs in November compared to 600,000 plus in October. How much of the data today do you think increases the urgency for stimulus? And if so, what is the White House willing to sign on to?
JOSEPH LAVORGNA: Well, the White House has, as you know, wanted to do an assistant plan for those people hurting for some time. And that's why the president took a variety of executive order actions this past summer. Certainly, people need assistance. While the unemployment rate certainly has surprised many people to the downside, we'd like it to get back to where it was pre-pandemic, when it was at a 50 year low.
So there are negotiations going on. We don't believe the recovery at the moment is in jeopardy if we raise taxes significantly. And we overturn business regulation and cripple basically, hiring, yeah, the economy will weaken. But absent that assistance, we'll certainly help those that need it. It'll give us an insurance policy. And we'll see what happens with negotiations, as you know, they are continuing.
- Yeah, to follow up on that negotiation question, I mean, people have been pointing out that states that have been seeing the spike in coronavirus cases continue to fare much worse here. We've heard from Fed chair Jay Powell that getting the pandemic under control is going to be necessary to see any sort of full recovery here. What would you say that this renewed push in cases, spike in cases is doing to the discussions and the compromises that people might want to see come through on that stimulus front? And where the president might sit on some of those thorny issues that are blocking it when we talk about liability protections or aid to states, specifically?
JOSEPH LAVORGNA: Yes, so one of the things that we've wanted from the get go, certainly, is more funding for the PPP, which has saved, we think, upwards of 50 million jobs. That actually was in some of the private sector research I've seen. So the PPP, the Payroll Protection Plan, was extraordinarily successful. President also has talked about giving aid to airlines, which certainly need it.
And of course, anything COVID-related as it relates to testing and helping various state and local municipalities with funding, we want to provide. In fact, if I recall correctly, we had $105 billion in such funding proposed over the summer, which is about $5 billion more than what the Democrats had proposed. What we don't want to do is give money for sort of a grab bag wish-list project of the left. So we thought we moved very significantly to the center, past the center in the summer. We'll see again what happens with negotiations.
Yes, today's number, as you highlighted, was weaker than expected. But keep in mind that the underlying trends, underlying fundamentals still look very good. We saw jobless claims the continuing claims move lower yesterday. We're seeing anecdotes of very strong housing-related sales. The weakness that you highlighted probably does reflect coronavirus restrictions and economic activity. But the good news, the great news is that Operation Warp Speed has been phenomenal. I thank the president for that. And we're going to get the vaccine.
So there is a very high likelihood that we're going to look-- the market will look past any abbreviated hit to economic activity, which could still be forthcoming, although we haven't seen much evidence of that yet, notwithstanding the modestly weaker payroll number. But the overall fundamentals, Zack, to our mind, look great. And we feel like the data of the last seven months has validated what we thought would be a V-shaped recovery or as the president likes to say, a super V-shaped recovery.
And if the Atlanta Fed is correct, and GDP this quarter is up 11%, that leaves us down less than 1% on the year, which means we're down less than 1% from the peak pre-pandemic high and economic output. I mean, that to me is extraordinary. And I wish more people talked about the positive instead of always focusing on the negatives.
- So bottom line, how close are we to a deal? And how should we be characterizing this? We've heard Senate Majority Leader Mitch McConnell come out yesterday saying he is optimistic a deal can get done by the end of the year. I mean, how would you characterize the White House stance right now and when are we likely to get it?
JOSEPH LAVORGNA: So Secretary Mnuchin, Chief of Staff Meadows are working with our colleagues, and I know they've been working tirelessly on it. Let's see what happens. I'm not-- I'm not going to venture a guess as to what they're saying privately.
- OK, Joseph LaVorgna, special assistant to the president, chief economist, as well, joining us from the White House lawn. It's great to have you on today. Thanks so much for your time.
JOSEPH LAVORGNA: Oh, it was great. Happy holidays. Thank you for having me.
-Same to you.