On jobs, former Obama aide Goolsbee warns against irrational exuberance

Olivier Knox

Leave it to the former chairman of President Barack Obama's Council of Economic Advisers to see the gray cloud in the silver lining of Friday's solid jobs numbers.

Wait, what?

You might recall Austan Goolsbee from that long-form commercial for Obama's re-election, for which a trailer was released Thursday. But on Friday, the University of Chicago business school economics professor warned against letting solid monthly jobs growth lead to irrational political exuberance.

"If GDP growth slows down some (which seems likely), we probably aren't going to see consistent big #s like this," he said on his official Twitter feed. For those who speak neither Economics nor Twitter, that translates to "If Gross Domestic Product (aka "the economy") slows down some (which seems likely), we probably aren't going to see consistent big numbers like this."

Goolsbee stopped well short of dismissing word from the U.S. Commerce Department that employers added 227,000 jobs in February, the third straight month in which the economy added over 200,000 positions. (Economists had expected growth of about 210,000. The official unemployment rate remains at 8.3 percent.)

In fact, Goolsbee called it "pretty big news," celebrated "huge gains" in one key jobs measure, before asking: "This is the sign of new businesses starting (finally), yes?"

(Daniel Gross, economics editor of Yahoo! Finance, writes that the report "confirmed that we have a trend of decent employment growth.")

Still, Goolsbee's comments reflect the difficult balancing act for both political parties in the face of what looks like the timid beginning of growth of a still fragile economy with not quite eight months before Election Day.

Republican House Speaker John Boehner said the new data gives "some encouragement" for struggling families and businesses, but painted Obama as more hindrance than help.

"It is a testament to the hard work and entrepreneurship of the American people that they are creating any jobs in the midst of the onslaught of anti-business policies coming from this administration," Boehner said in a statement.

And House Majority Leader Eric Cantor described the economy as "slowly adding new jobs" but reaffirmed that "jobs aren't created by Washington" and noted how the House had adopted a Republican-drafted but Obama-backed bill, the JOBS Act, to boost growth.

"This is a welcome sign that we can put aside our differences and come together to produce results and create a thriving economy," he said.

The White House performed its own balancing act on the news, with a careful statement from Goolsbee's successor, Alan Krueger, calling it "further evidence that the economy is continuing to heal" from the devastating 2008 collapse.

"It is critical that we continue the economic policies that are helping us dig our way out of the deep hole," said Krueger.

But Krueger injected a note of caution: "The monthly employment and unemployment numbers can be volatile, and employment estimates can be subject to substantial revision. Therefore, as the administration always stresses, it is important not to read too much into any one monthly report."

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