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Welcome to "Ask the White House" -- an online interactive forum where you can submit questions to Administration officials and friends of the White House. Visit the "Ask the White House" archives to read other discussions with White House officials.

Greg Mankiw
Greg Mankiw
President's Economic Advisor
April 2, 2004

Greg Mankiw
Hello, it's nice to be back here to talk to you about the economy and today's job report. I'm ready to take your questions.

ted, from east lansing writes:
do these job numbers indicate to you that the "jobless recovery" is no more -- that the lag is no longer?

Greg Mankiw
Hi Ted

Today's employment report confirms the other economic statistics we have been observing over the past six months. The recovery is on track. Incomes are growing and jobs are being created.

Since August, the economy has created 759,000 jobs. The unemployment rate has fallen from its peak of 6.3 percent to 5.7 percent.

This is progress but it is not enough. Most private sector forecasts indicate that the recovery will continue and that job creation will remain robust throughout the year.

Al, from Buckhannon, West Virginia writes:
I love politics and how both parties are spinning today's job numbers.

How do you respond to this statement? Representative Pete Stark from California released it today....

"The president and administration officials are expressing pride in the

fact that the economy has finally started to create some jobs, but on the third anniversary of the Bush jobs slump, we are still in a deep hole."

Greg Mankiw
The President is in West Virginia, Al. So perhaps you can see him today.

The economy has been operating under the pressure of several contractionary forces over the past several years. The end of the high tech bubble, corporate governance scandals, and terrorist attacks have all put downward pressure on economic activity.

The President responded to these challenges with pro-growth fiscal policies. Together with interest rate cuts enacted by the Federal Reserve, the President's policies have mitigated the effect of these adverse shocks and led to the recovery we are currently experiencing.

Daniel, from Seattle, WA writes:
How are the Bush tax cuts effecting the growth of our economy?

Greg Mankiw
The President's tax cuts were aimed at creating jobs in the short run and promoting sustained economic growth in the long run. They put money in people's pockets and increased the demand for goods and services. When businesses have more customers, they hire more workers. In addition, lower marginal tax rates enhance the incentive to work and invest, leading to more rapid economic growth.

Henry, from Augusta, Maine writes:
Is it possible to reduce the number of jobs being lost to cheaper labor overseas? How can we make it more competitive for our industries to stay in this country?

Greg Mankiw
The President's economic policies are precisely aimed at encouraging businesses to expand and create jobs in the United States. In addition to the tax cuts, he wants to reduce the burden of frivolous lawsuits, contain the growth of health costs, ensure a reliable energy supply, and streamline regulations.

The President has correctly said that retreating to economic isolationism, as some have suggested, would be the wrong policy to promote economic growth and create good jobs.

American workers are among the best in the world and can compete in a free and open global marketplace.

The President is therefore focused on opening up markets around the world.

Norm, from Harpers Ferry writes:
Today's job numbers are pretty amazing. I wonder what John Kerry will attack the President on now.....

My question is....why do you guys (economists) always seem to get it wrong? Expectations were positive but no one predicted this. Just like the month before economists were too optimistic.

I'm a pilot, Greg. And -- no offense -- but there wouldn't be much of an aviation industry if we had the same track record.

Greg Mankiw
You are right, Norm, that economists rival weathermen regarding their forecasting acumen. I am glad that pilots have a better track record.

Part of the uncertainty in this recent business cycle is the behavior of productivity growth. Over the past several years, productivity growth has been exceptionally strong. This means that we need even stronger economic growth to generate employment gains.

But we should not lament rapid productivity growth. Higher productivity means higher real incomes and, over time, higher real wages for workers. Businesses can afford to pay workers more when those workers are more productive.

Gary, from Washington, dc writes:
Dr. Mankiw, I am an undergraduate student using your economics textbook.

It has been absolutely wonderful, thus far. I hope to become an economics professor someday. My question is the follwing: Do you believe that the current economic expansion will, in the long run, reduce the deficit. Indeed, isn't economic growth and a sound fiscal policy the key for alleviating a wartime deficit. Thank you for your time and keep up the great work.

Greg Mankiw
The deficit is unwelcome, and the President has said that he will reduce it in half over the next five years. This will occur through a combination of economic growth, which will bring in more revenues, and spending restraint. The President has submitted a budget that will accomplish these goals and we are working with Congress to ensure that spending restraint is in fact achieved.

Lisa, from Tampa, Florida writes:
That is fantastic that we have added 300,000 jobs to our economy. But I don't understand why the unemployment rate has gone up.

Greg Mankiw
The employment report is actually a report of two separate surveys of labor market. The number of jobs created is typically taken from the payroll survey, which is a survey of businesses. The unemployment rate is taken from a survey of households.

Sometimes these two surveys move in different directions and indeed that has been the case over the past several years. Fortunately both surveys indicate that the labor market is heading in the right direction since last summer.

According to the payroll survey the economy has created 759,000 jobs since August. According to the household survey the economy has created 978,000 over the same period. The unemployment rate, which also comes from the household survey, has fallen from its peak of 6.3 percent in June to 5.7 percent most recently.

The bottom line is that the economy is heading in the right direction, regardless of which survey you look at.

Millie, from Lexington, Ky writes:
Today's news is great news. How do we make sure that this trend continues? I am interested in your thoughts.

Greg Mankiw
That is a good and important question. The answer is continuing with the President's pro-growth economic policies. That includes making the tax cuts permanent. That also includes resisting the pressure to succumb to the economic isolationists. I know some have suggested raising taxes on the American people -- that action would put the recovery in jeopardy.

Mike, from Chapel Hill writes:
As a small business owner, I pay close attention to the economy but did not understand why employment didn't match up to all the other economic indicators. Today is certainly good news.

The New York Times wrote this: "This is a watershed number," said Mickey Levy, chief economist at Banc of America Securities. "It realigns the employment conditions with all the other economic data."

How significant is today's news?

Greg Mankiw
Like you, the President's economists pay attention to many statistics when monitoring the economy. You are right that the employment data have been among the last of the statistics to fall into line as the economy has recovered from the recent recession.

Today's numbers indicate that the labor market, like the rest of the economy, is on track for a robust 2004.

Greg Mankiw
Thank you again for your questions. I look forward to doing this again soon.