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CNN Live At Daybreak

Economic Recovery

Aired December 04, 2003 - 07:16   ET

THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.

THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.


ANDERSON COOPER, CNN ANCHOR: Another early Christmas present for the Bush administration, a powerful report on productivity is the latest sign that a once crippled economy may be getting back on its feet.
So, the question is: Are we now in a full-fledge recovery mode?

Bank One chief economist Diane Swonk, author of "The Passionate Economist," joins us now from Chicago.

Diane, good to see you this morning.

DIANE SWONK, CHIEF ECONOMIST, BANK ONE: Good to see you.

COOPER: Is it fair to say we are in full recovery mode at this point?

SWONK: We are in full recovery mode. It couldn't happen any later, but we are finally in full recovery mode, and at least it's happening now. The economy is gaining momentum going into the holiday season, and we'll see it come through in 2004 as well. We're not going to drop the ball this time around.

COOPER: You know, the word you keep hearing from a lot of people, and particularly Democratic candidates running for president, is "jobs." Are we going to see an uptick in the jobless rate?

SWONK: Well, what we're finally seeing is an uptick in payrolls, and we're going to see some declining unemployment rate, although not as rapidly as we like. Remember that backward looking indicator, people join the labor forces, things look a little better out there.

But it looks like we've already generated about 300,000 jobs since August. We're going to see another jobs report on November. And aside from the strike in California, which shaved about 60,000 off the top, it looks like we generated about 150,000 jobs in the month of November. We have not seen numbers like that in a long time.

COOPER: Where were those jobs, though? Are they manufacturing jobs? Because, I mean, that's what people are really looking for.

SWONK: Right. The manufacturing jobs, I think we're going to see the bloodletting in many manufacturing sectors abate. We saw this week that the manufacturing sector saw its strongest gains in 20 years. Of course, it's coming off of extremely low levels, and it's still playing catch-up. Most of the jobs are still in tourism, in the seasonal industries, but these are industries that we haven't seen hiring in the recent years.

Remember, we had the aftermath of 9/11. Nobody wanted to go on trips, and then again, Iraq-phobia, fear of the war a year ago, kept a lot of people at home. Instead of cocooning, people are Cancun-ing (ph) and getting out of a bit. And because they booked ahead of time, many resorts are stepping up.

COOPER: No matter where you lie politically, there has been a lot of government spending the last couple of years. How concerned are you about deficits?

SWONK: I'm actually very concerned about deficits. The problem is they take a long time to actually have consequences. And so, we'll see lots of near-term gains, and the next couple of years will be reminiscent of the boon years of the 1990s. But there is no free lunch out there. And these gains will be at a price later in the cycle. The problem is it's outside of most people's political scope, at least for an election year in 2004.

COOPER: There are still a bunch of states -- I mean, some states, 14 states, are still in recession. Do you buy that?

SWONK: There are. In fact, many of them are in my own backyard. The state of Michigan had severe restructuring. They're running a 7.6 percent unemployment rate, a full percent and a half above the national average today and still in very hard times. They are going to continue to see struggle, because they've got the auto industry, which continues to consolidate. So, even as manufacturing is coming back, they're not getting to participate fully in that.

So, clearly there are some real laggards out there. The good news is Chicago and Illinois, so close to the state of Michigan, is doing much better.

COOPER: All right, Diane Swonk joining us from Chicago this morning. Thanks Diane.

SWONK: Thank you.

TO ORDER A VIDEO OF THIS TRANSCRIPT, PLEASE CALL 800-CNN-NEWS OR USE OUR SECURE ONLINE ORDER FORM LOCATED AT www.fdch.com.







Aired December 4, 2003 - 07:16   ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
ANDERSON COOPER, CNN ANCHOR: Another early Christmas present for the Bush administration, a powerful report on productivity is the latest sign that a once crippled economy may be getting back on its feet.
So, the question is: Are we now in a full-fledge recovery mode?

Bank One chief economist Diane Swonk, author of "The Passionate Economist," joins us now from Chicago.

Diane, good to see you this morning.

DIANE SWONK, CHIEF ECONOMIST, BANK ONE: Good to see you.

COOPER: Is it fair to say we are in full recovery mode at this point?

SWONK: We are in full recovery mode. It couldn't happen any later, but we are finally in full recovery mode, and at least it's happening now. The economy is gaining momentum going into the holiday season, and we'll see it come through in 2004 as well. We're not going to drop the ball this time around.

COOPER: You know, the word you keep hearing from a lot of people, and particularly Democratic candidates running for president, is "jobs." Are we going to see an uptick in the jobless rate?

SWONK: Well, what we're finally seeing is an uptick in payrolls, and we're going to see some declining unemployment rate, although not as rapidly as we like. Remember that backward looking indicator, people join the labor forces, things look a little better out there.

But it looks like we've already generated about 300,000 jobs since August. We're going to see another jobs report on November. And aside from the strike in California, which shaved about 60,000 off the top, it looks like we generated about 150,000 jobs in the month of November. We have not seen numbers like that in a long time.

COOPER: Where were those jobs, though? Are they manufacturing jobs? Because, I mean, that's what people are really looking for.

SWONK: Right. The manufacturing jobs, I think we're going to see the bloodletting in many manufacturing sectors abate. We saw this week that the manufacturing sector saw its strongest gains in 20 years. Of course, it's coming off of extremely low levels, and it's still playing catch-up. Most of the jobs are still in tourism, in the seasonal industries, but these are industries that we haven't seen hiring in the recent years.

Remember, we had the aftermath of 9/11. Nobody wanted to go on trips, and then again, Iraq-phobia, fear of the war a year ago, kept a lot of people at home. Instead of cocooning, people are Cancun-ing (ph) and getting out of a bit. And because they booked ahead of time, many resorts are stepping up.

COOPER: No matter where you lie politically, there has been a lot of government spending the last couple of years. How concerned are you about deficits?

SWONK: I'm actually very concerned about deficits. The problem is they take a long time to actually have consequences. And so, we'll see lots of near-term gains, and the next couple of years will be reminiscent of the boon years of the 1990s. But there is no free lunch out there. And these gains will be at a price later in the cycle. The problem is it's outside of most people's political scope, at least for an election year in 2004.

COOPER: There are still a bunch of states -- I mean, some states, 14 states, are still in recession. Do you buy that?

SWONK: There are. In fact, many of them are in my own backyard. The state of Michigan had severe restructuring. They're running a 7.6 percent unemployment rate, a full percent and a half above the national average today and still in very hard times. They are going to continue to see struggle, because they've got the auto industry, which continues to consolidate. So, even as manufacturing is coming back, they're not getting to participate fully in that.

So, clearly there are some real laggards out there. The good news is Chicago and Illinois, so close to the state of Michigan, is doing much better.

COOPER: All right, Diane Swonk joining us from Chicago this morning. Thanks Diane.

SWONK: Thank you.

TO ORDER A VIDEO OF THIS TRANSCRIPT, PLEASE CALL 800-CNN-NEWS OR USE OUR SECURE ONLINE ORDER FORM LOCATED AT www.fdch.com.