Market Call - Transcript

CNNFN

SHOW: MARKET CALL 09:00 AM Eastern Standard Time

September 3, 2004 Friday

Transcript # 090303cb.l05

HEADLINE: Two Ways For States To Play Gambling Revenues; Sen. Grassley On Jobs Report, CNNfn

GUESTS: Eugene Christiansen, Charles Grassley

BYLINE: David Haffenreffer, Susan Lisovicz

HAFFENREFFER: For more on the jobs report out this morning from the Labor Department and what it says about the overall economy, we're joined by Republican Senator Chuck Grassley of Iowa. He is at the Nasdaq MarketSite in Times Square this morning, as the RNC wound up last night here in New York City.

Welcome to the program, Senator.

SEN. CHUCK GRASSLEY ®, IOWA: Oh, I'm glad to be with you.

HAFFENREFFER: A drop in the unemployment rate this morning, down to 5.4 percent. Jobs creation coming in at about 144,000. Some upward revisions to the two prior months, as well, June and July. Characterize for us the state of the jobs market in this country.

GRASSLEY: Well I think it's all very-continuation of a very positive trend. And I don't like to concentrate on one month, or two months, but we've had a trend of job growth here for 12, 13 months in a row, and I think it's the trends that are very important.

And commentary on the 5.4 percent unemployment, throughout my lifetime there's just a few years that we've had unemployment this low. And we ought to feel we're in economic clover because of the low unemployment rate compared to where it's been over history over a long period of time.

HAFFENREFFER: Does it concern you that the reason why the unemployment rate declined this month for the most part, is because the pool of available workers shrunk during the month?

GRASSLEY: No. I think you ought to think that is kind of a normal thing that happens during this time of year. As people leave the workforce, maybe to go back to college, for various reasons. We have-as long as we're comparing apples and apples, from one year to the other. I don't see anything extraordinary about those sorts of adjustments compare to September of last year, or August of last year.

HAFFENREFFER: I want to ask you about some of the themes that the Kerry administration has been putting their finger on. We have Roger Altman here, who's coming up in a moment with Susan. He's senior economic advisor to the Kerry/Edwards campaign, talking a little about how the jobs being created in this economy are not paying as much as the jobs being lost. There is some debate as to whether or not that is true. Whether the gap is closing now on wage growth. Your thoughts, your observations?

GRASSLEY: Sure. Maybe a job loss in manufacturing, its successor job for that individual may not pay as much. What you forget is a large percentage of jobs being created that are in the managerial class and professional class that do pay very, very well. And I think it's very unfair to compare a job loss with a job that takes its place, because we have 4 million people that leave one job, either want to change or are fired, or for some reason leave.

And we have 4 million new jobs created every month. We have a very dynamic economy. When you point out just at few manufacturing jobs that are lost to lesser paying jobs, it doesn't speak for the entire economy. I think we ought to focus on the dynamics of the American economy and the greatness of the American economy, because it is a miracle that's working.

HAFFENREFFER: The president in his acceptance speech of the nomination last night at the RNC talked about his desire to rein in spending during a possible second term for him. Has he left himself vulnerable to criticism on that front given the-not once pulled out his veto pen in the past four years?

GRASSLEY: Yes, well, I think it would be better if the president would set a very-draw a line in the sand, let's say, along that line, with a very spend-thrifty Congress.

But here's what I think you ought to focus on for the president. He has already established a very credible record as far as domestic discretionary expenditure is concerned, as far as bringing the budget under control. We inherited 8 or 9 percent increases under the Clinton administration. We have discretionary expenditures down to 0.9 of 1 percent increase this year. We have 4 percent overall increases. Why? Because of the war on terrorism, Homeland Security going up 10 percent, and Defense going up 7 percent. Once we get Homeland Security and the war on terror under control, then the rest of the budget will speak for itself, and the budget deficit will come down.

HAFFENREFFER: Senator Chuck Grassley, thank you for being with us today.