Nobel-winning economist Robert Shiller warns that he thinks the nation’s jobs picture is not as bright as it seems.
The economic guru spokr just hours after the U.S. unemployment rate dropped to near a 50-year low of 3.5% in September, with job growth increasing moderately, suggesting the slowing economy could avoid a recession for now despite trade tensions that are hammering manufacturing.
The Labor Department’s closely watched monthly employment report on Friday, however, contained reminders that the risks to the longest economic expansion on record remained tilted to the downside.
Wage growth stagnated and manufacturing payrolls declined for the first time in six months. The retail and utilities sectors also continued to shed jobs, Reuters explained.
However, the unemployment rate reaching new 50-year lows may not actually be the best indicator of job market and economic strength, the Yale professor told CNBC.
“You can spin this report any way you want,” he says. “The unemployment rate is a fuzzy number,” he said.
“The flat wage number in this report suggests it’s not really a strong economy,” he explained.
“I don’t know if it is entirely comparable to 50 years ago. We have different thoughts about that now,” said Shiller, who won the Nobel Prize in economics in 2013 for his work on asset prices and inefficient markets.
“It looks kind of hard to criticize Trump’s economic success,” he said.
Nonfarm payrolls increased by 136,000 jobs last month, the government’s survey of establishments showed. The economy created 45,000 more jobs in July and August than previously estimated. Economists polled by Reuters had forecast payrolls would increase by 145,000 jobs in September.
September’s job gains were below the monthly average of 161,000 this year, but still above the roughly 100,000 needed each month to keep up with growth in the working-age population. The smaller household survey from which the unemployment rate is derived showed a jump of 391,000 in employment in September.
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