Kevin, what do you make of the criticisms that you are too close to the president to be independent enough to be considered the next fed chair?
Well, it's true that I'm close to the president. We've worked together closely since 2017. I think that the idea that being close to the president and serving the president well disqualifies someone for any job, it just doesn't make any sense to me.
How concerned are you the unemployment rate keeps rising?
Well, the other thing that rose was labor force participation. And I think that right now -- I think for those two things to happen, probably what's going on is the 250,000 federal government workers who took the -- the buyout are staying in the labor force and looking for work. And so we saw a big reduction, about 250,000 in federal employment.
We saw an uptick in the unemployment rate, but we also saw an uptick a few months in a row of labor force participation, so I think those government workers are out there looking for jobs. And there's an academic literature that suggests that they'll be very successful at it because government workers tend to be very well qualified when they hit the private sector.
So not worried. Do you think they'll come down?
Excuse me?
You're not worried then about the unemployment rate?
Oh, I think it should come down, yeah, as they're searching for new jobs.
Kevin?
Yeah.
Given the delay in all of these labor numbers, how much stock should we put in any of them? I mean, is this a realistic look at what the economy is right now?
We need to get a BLS commissioner that revisits how the data are calculated, that there's a big difference over time between the household survey and the payroll survey and they should be about the same. If you ask households, do you have a job and then you add them up or if you ask firms, are you giving jobs to people, if you add them up, they should be about the same number.
And during the Biden administration, they diverged by more than two million people over that time. And so like these are the best numbers we have. They're the ones we have to go on. But we also should look at everything else that we're seeing. And so for me, one of the things that I think is strongest, we're very good at measuring output and income.
And GDP now, right now is a little bit below four percent, second quarter in a row would. When output is that high, then normally job growth is really solid. And so it would be very unusual for job growth not to keep up with GDP in the long run once we see the revisions.
But do you -- I mean, are these numbers accurate given there was such a delay with the government shutdown and how they were reported?
Yeah. I think that the surveys were done according to their normal procedures. Yes.
Kevin, two quick questions. First, to follow up on the fed chair question, being close to the president is one thing, but if you were to serve in that position, can you reassure the American people that you would make decisions independent of what the president asks of you?
Yeah. The job of the Federal Reserve chair is to run the Federal Reserve independently. It's also the job of the Federal Reserve to be nonpartisan and to focus on monetary policy. And I think that one of the things that the president's been disappointed in is that the fed has been quite partisan in cutting rates right before an election, focusing so much on issues other than monetary policy.
And so I think that it's very easy to conceive of someone from, you know, inside this building or that building going over there, like Steve Myron is doing right now, and doing a great job of being an independent governor or chair.
When do you think you'll learn the final decision?
The president has said that he'll make his final decision by the end of the year or the beginning of next year.
Where do you think interest rates will go from here? Do you think -- how much lower do you think they should be?
Well, because we've got such a huge increase in supply, which we're seeing, there's a capital spending boom. We've got groundbreakings for factories all over the country. We've got plans to increase power generation that's unlike anything I've ever seen, like maybe in the next five years, getting as much new power online as we've done over the last 20 or 30 years.
And so all of that stuff is really positive for -- for what's going to happen to the future for growth.
Hey, Kevin -- Another question on jobs. Some analysts have been saying that the country is de facto in a recession since it only added 100,000 jobs over the last six months. What's your comment on that?
Right. Well, the thing is that we've for this year added about 700,000 private sector jobs and reduced about 250,000 federal government worker jobs, which is part of the strategy that the president has to reduce the runaway deficit. And so the deficit this year is looking like it's going to be $600 billion lower than it was last year, which would give you about $7 trillion, $8 trillion in savings over a 10-year period if it were to stay like that.
And so that's really, really good for the long run health of the economy and the job number has stayed strong even though we're being really fiscally tight by reducing the deficit so much. That's a sign of the success of the whole portfolio of policies. I think I have time for one more question. OK.
So Kevin, wait, we're seeing construction jobs now.
Yeah.
When does that become manufacturing jobs, because we haven't had a loss?
Well, they have to finish the building, but yeah.
Right. So when do you think -- what's the time frame, six months? What do you mean --
Yeah, six months, something like that.
You think first, second quarter?
Yeah, yeah, that's about right.
We'll start to see the manufacturing jobs sort of pick up?
That's about what it should be. Yeah. Thanks. OK. Thank you, guys. OK. Thanks.
When are you aiming to get those stimulus checks --