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White House Focuses on Unemployment Rate

Aired May 02, 2003 - 14:08   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.


MILES O'BRIEN, CNN ANCHOR: Connecting the dots between tax cuts and the jobless rate. That can be a difficult thing to explain to the American people. But, nevertheless, the unemployment rate is something that the White House will be focusing very closely on as the political season arrives.
CNN's Kathleen Hays joins us from New York for more on the unemployment figures. I'd say they're probably at the top of the list when you are in government and you are looking for a possible re- election bid, right, Kathleen?

KATHLEEN HAYS, CNN CORRESPONDENT: Absolutely, Miles. You know, I think something that's so interesting about that unemployment rate at 6 percent, you've got to remember there's a lot of people right now, they're called discouraged workers, who aren't even being counted in that number. Here's how it works: The government actually calls people at home, the Labor Department, and asks you if you're working or not. It has a sample of people.

If you tell the government, I've stopped looking because I can't find a job, you are a discouraged worker. And in fact, this year, this April, compared with April a year ago there's some 467,000 more Americans who are discouraged, compared to 320,000 last year. But get this. According to the definition, if you are not looking for a job, you are not in the labor force. If you're not in the labor force you aren't counted as unemployed. So the fact that the job prospects are bleak, the fact that people can't find jobs, they're staying unemployed longer, is in a way helping to keep that unemployment rate lower than it would be otherwise.

On Wall Street, a lot of people focus more on that payroll number, that loss of 48,000. You know we've seen job losses five in the past seven months in this economy?

O'BRIEN: Wow, that's striking right there, especially when you look at how robust the economy was for so long. Is it difficult when you start parsing through these numbers, is it precarious making predictions on trends and so forth? What has history told us about all that?

HAYS: I think what history tells us is that sometimes the job numbers are like an indicator. They tell you what's happening now. They don't tell you what's going to happen in the future. When will companies start hiring? They'll start hiring when they think they're going to see more demand, more orders, or when they're actually seeing them. So these numbers only give us a snapshot of where we are. They can't exactly tell us where we're going.

It's interesting, though, if you want to look at history, the manufacturing sector lost 95,000 jobs in April, it's about twice the recent average. It's the 33rd month in a row that the manufacturing sector has lost jobs. And in the services sector, which employs about 80 percent of the people in this country, the net job gain was something like 25,000. When the economy is healthy, you would see a gain of more like 200,000 in services jobs.

One of the challenges for President Bush is going to be to fight some long-term trends. In the past, you know, it's been textile workers, it's been people who manufacture commodities and have seen their jobs go overseas, but more and more, with the spread of technology, we're seeing more white collar jobs go overseas. We're seeing financial services jobs go overseas. Those jobs go overseas, they don't come back. So, again, as President Bush tries to rev this up with tax cuts, he's got a big job on his hands, Miles.

O'BRIEN: Boy, once we lose the service jobs, what's left? I don't know.

HAYS: Hey, TV anchors are next, I'm afraid.

O'BRIEN: I'm afraid that is a service, isn't it? It depends.

HAYS: Could be.

O'BRIEN: That's a rather subjective interpretation on that.

Kathleen Hays, thank you very much.

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 May 2, 2003 - 14:08   ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
MILES O'BRIEN, CNN ANCHOR: Connecting the dots between tax cuts and the jobless rate. That can be a difficult thing to explain to the American people. But, nevertheless, the unemployment rate is something that the White House will be focusing very closely on as the political season arrives.
CNN's Kathleen Hays joins us from New York for more on the unemployment figures. I'd say they're probably at the top of the list when you are in government and you are looking for a possible re- election bid, right, Kathleen?

KATHLEEN HAYS, CNN CORRESPONDENT: Absolutely, Miles. You know, I think something that's so interesting about that unemployment rate at 6 percent, you've got to remember there's a lot of people right now, they're called discouraged workers, who aren't even being counted in that number. Here's how it works: The government actually calls people at home, the Labor Department, and asks you if you're working or not. It has a sample of people.

If you tell the government, I've stopped looking because I can't find a job, you are a discouraged worker. And in fact, this year, this April, compared with April a year ago there's some 467,000 more Americans who are discouraged, compared to 320,000 last year. But get this. According to the definition, if you are not looking for a job, you are not in the labor force. If you're not in the labor force you aren't counted as unemployed. So the fact that the job prospects are bleak, the fact that people can't find jobs, they're staying unemployed longer, is in a way helping to keep that unemployment rate lower than it would be otherwise.

On Wall Street, a lot of people focus more on that payroll number, that loss of 48,000. You know we've seen job losses five in the past seven months in this economy?

O'BRIEN: Wow, that's striking right there, especially when you look at how robust the economy was for so long. Is it difficult when you start parsing through these numbers, is it precarious making predictions on trends and so forth? What has history told us about all that?

HAYS: I think what history tells us is that sometimes the job numbers are like an indicator. They tell you what's happening now. They don't tell you what's going to happen in the future. When will companies start hiring? They'll start hiring when they think they're going to see more demand, more orders, or when they're actually seeing them. So these numbers only give us a snapshot of where we are. They can't exactly tell us where we're going.

It's interesting, though, if you want to look at history, the manufacturing sector lost 95,000 jobs in April, it's about twice the recent average. It's the 33rd month in a row that the manufacturing sector has lost jobs. And in the services sector, which employs about 80 percent of the people in this country, the net job gain was something like 25,000. When the economy is healthy, you would see a gain of more like 200,000 in services jobs.

One of the challenges for President Bush is going to be to fight some long-term trends. In the past, you know, it's been textile workers, it's been people who manufacture commodities and have seen their jobs go overseas, but more and more, with the spread of technology, we're seeing more white collar jobs go overseas. We're seeing financial services jobs go overseas. Those jobs go overseas, they don't come back. So, again, as President Bush tries to rev this up with tax cuts, he's got a big job on his hands, Miles.

O'BRIEN: Boy, once we lose the service jobs, what's left? I don't know.

HAYS: Hey, TV anchors are next, I'm afraid.

O'BRIEN: I'm afraid that is a service, isn't it? It depends.

HAYS: Could be.

O'BRIEN: That's a rather subjective interpretation on that.

Kathleen Hays, thank you very much.

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