The economy can generate 12 million new jobs over the next four years if President Barack Obama is re-elected in November, says Larry Summers, former Treasury Secretary under Obama.
That number is “a reasonable forecast,” Summers tells CNNMoney. It would entail payroll growth of 250,000 a month, or more than 2.5 times August’s total of 96,000.
“The fact that we’re in this valley means we have much more room to climb for jobs than would normally be the case,” says Summers, now a Harvard professor.
Editor's Note: You Deserve to Know What Obama and Bernanke Are Hiding From Americans
Several factors suggest the 12 million figure is realistic, he says. “Most important, we’ve been creating close to 1 million households each year and we’ve been building far fewer houses because of excess inventories.”
Those inventories are now mostly depleted, Summers says, “so, most economists expect housing construction to pick up.”
Thus, if Obama is re-elected and able to implement his housing plan, the 12 million goal can be reached, Summers says.
He doesn’t see Europe as an obstacle. The European Central Bank’s bond-buying commitment is a sign “the European situation may be coming under some control,” Summers says.
For the short term, not many economists are enthusiastic about jobs, especially after the weak data for August.
"Every major aspect of the report was negative," Stephen Stanley, chief economist at Pierpont Securities, tells The Wall Street Journal.
“[W]e're back into one of those phases where we're looking at clearly subpar numbers."
Editor's Note: You Deserve to Know What Obama and Bernanke Are Hiding From Americans
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