Ken Goldstein, economist, The Conference Board believes the US economy can grow at 2.5 percent in the second half of CY 2013.
American jobs are likely to increase to an average of 200,000 per month and employment growth will help sustain the 2.5 percent growth in 2014 as well, he said in an interview to CNBC-TV18. Justifying his bullish stance, Goldstein says improving global sentiment and momentum coming from the US housing sector will give a boost to US.
The US unemployment rate notched lower to 7.6 percent beating expectations of an unchanged reading of 7.7 percent. The economy added just 88,000 jobs last month and this has been the slowest hiring pace in nine months.
Below is the edited transcript of Goldstein’s interview to CNBC-TV19.
Q: Can you take us through what these numbers mean to you?
A: We have to step back and look not just at the last month, but at the last two months data because there is some seasonality, some statistical perk in these numbers. There were 268,000 new jobs in February but only 88,000 in March. On an average, the two months numbers do not look that bleak. There is just something quirky with the data so I don't think it is quite as bad as it looks on the surface.
What we also have here are companies that have already been very cautious, worried about the impact of the Sequester which is only now beginning to bite in.
Q: What is it that we should really be looking at in terms of a realistic picture of how the jobs market is doing?
A: Don't try to read too much into just one number. February was not that good, March not that bad. Today’s retail sales data shows a totally different message. So, one has to read the data together. We are currently in a labour market that had some momentum but now, we are about to go over a speed bump in terms of the Sequester.
Now, whether this lasts for two or three months, by the second half of this year we are going to get upto an average of about 200,000 new jobs a month. This will result in a GDP growth of about 2.5 percent and then sustain that into 2014. So, we are hit in the soft patch going over speed bump but the fundamental is US economy has momentum behind it. And the momentum is coming from the housing market and because the global economy is improving. However, we are running into this cross wind coming from the Sequester.