'Business goes on' as President Trump tests positive for COVID-19: Special Assistant To The President

President Trump has tested positive for the coronavirus, sending markets tumbling. Special Assistant To The President & National Economic Council Chief Economist Joseph LaVorgna joins the On the Move panel to discuss.

Video Transcript

JULIE HYMAN: First off, we do want to get more reaction on that jobs report and talk about what's happening in Washington. We invite into the program, Joseph LaVorgna. He is special assistant to the president and National Economic Council [INAUDIBLE] joining us from the White House. Joe, thank you so much for joining us.

Before we jump into-- to the jobs numbers, I have to ask how you're doing with all of this going on in Washington, with these positive coronavirus tests from the president and first lady, how are you feeling, not just physically but sort of emotionally?

JOSEPH LAVORGNA: Uh, doing very well. We are working hard. The data today was excellent, which we're going to talk about. And as Chief Meadows had said earlier on the North Lawn, the president and the first lady have mild symptoms. We're praying and wishing for a speedy recovery, but we're working and business goes on.

ADAM SHAPIRO: Good to have you here. And when you say that the data was excellent, I'm not going to make a judgment call about good or bad. But I am curious-- we saw that in September the number of permanent job losers increased by 345,000, that's 3.8 million. This is a pandemic situation, but those are jobs that analysts tell us are not coming back. That's got to be troubling. Doesn't matter what political party you're in.

JOSEPH LAVORGNA: Well, I would be careful, but those numbers bounce around a lot, and a lot of those same analysts thought the unemployment rate would go to 20%. And instead, what we've seen is the rate fall by basically half almost from where it was in April. So I would take issue with that and say the economy is coming back. We're creating a lot of jobs, a record amount of jobs, and also we've got a lot of new industries that are coming post-coronavirus. So the labor market is fertile. The continuing claims continue to drop, and there's a lot of good news here.

JULIE HYMAN: Joe, it's Julie again. We spoke yesterday with the principal economist at LinkedIn, so obviously they have their finger on the pulse of the job market as well. And he talked about a so-called COVID ceiling-- in other words, that there are only so many jobs that can return when coronavirus is not controlled, right, or is not even gone or there's not a vaccine, for example, because restaurants are not opening back up at full capacity to just give an example of one industry. What do you think of that notion of the COVID ceiling? Are we just going to have to wait for a full recovery?

JOSEPH LAVORGNA: No, I mean, if you look at the data, we actually had really strong gains. In fact, 2/3 of the increases have been in the areas that arguably most afflicted by COVID-- retail trade, leisure, and hospitality as well as health care and social assistance. Those three industries have accounted for about 2/3 of the almost 11.5 million jobs that have been created since April.

So we have to look at the fact that we've had a much more robust V-shaped recovery than people thought. There will be some different sectors and industries that will behave perhaps differently in terms of how they perhaps work. I mean, certainly working from home is becoming more of an option, but there's a lot of new technologies. There's a lot that's going on.

But the dynamism of the economy to me is very, very apparent. We see it weekly in the new business formation data. We've seen obviously, as I mentioned earlier, a massive drop in continuing claims, down almost 13.5 million. The job market certainly has outperformed expectations, and while the headline may have been weaker, keep in mind the private number was bang on with consensus expectations. It was actually about 2,000 higher. So the labor market is doing really well, and I would be very careful in writing this economy off in any way when it's basically surprised everybody to the upside.

RICK NEWMAN: Hey, Joe, Rick Newman here. The unemployment rate dropped by half a percentage point, which sounds like good news, but many economists are pointing out the reason that happened is the labor force shrunk by about 700,000 people which suggests unemployed people are just giving up looking for work. Can you put any positive spin on that?

JOSEPH LAVORGNA: I would have put a positive spin on it. I would say from looking at these numbers having done it for a while, the figures month-to-month could move around quite a lot. But we're up over a point on the participation rate since April, and actually the household survey since you mentioned it shows civilian employment actually up over 14 million compared to the 11.4 I highlighted earlier on the payroll side. Moreover, the U-6, which is the broadest range of labor utilization, that plunged, down 1.4 points to 12.8. Again, that also was much lower than expected, just as the unemployment rate figure you just cited.

RICK NEWMAN: Joe, how important is it that there be another stimulus bill? I mean, honestly it looks like there's not going to be another bill before election day, but many economists are saying, look, we're seeing signs. People are running out of income. We're seeing where they're-- the drop off from the unemployment plus ups and the stimulus checks-- how important is it to get more money out into the economy?

JOSEPH LAVORGNA: The income numbers look to me really good when you look at the wage, the job, and the hours numbers. Actually today it points to very solid September income creation. Yesterday we saw in the income and consumption report that real wages rose 1% in the month. They're up over 20% annualized since April. So there's a lot of income.

Having said that, we would like us-- another stimulus bill if possible. The president wants to do more to get this economy moving, and that's why he's used executive order. So if we get extra stimulus that's fantastic, but the key point is we clearly see in the data a very self-feeding, self-sustaining recovery thanks to the president's actions. And you see just yesterday, in fact, the Atlanta Fed, widely followed their GDPNow model, lifted their Q3 forecast to 35%.

There wasn't virtually any private-sector economists looking for that sort of gain just a few months ago. So I think you have to put this in the context of the Super-V-shaped recovery the president has been talking about. It seems to me it's very obvious in the data.

JULIE HYMAN: Not to everyone though, Joe. Well, we're going to get some other perspectives throughout the show. Joseph LaVorgna, thank you so much. Special assistant to the president--

JOSEPH LAVORGNA: Thank you.

JULIE HYMAN: And National Economic Council chief economist. Thank you so much. Appreciate it.