Romer Says August Payrolls Report Shows U.S. Won't Relapse Into Recession

Christina Romer, President Barack Obama’s departing chief economist, said a report that U.S. companies added more jobs than forecast ends concern the economy may slide back into a recession.

“I think it does erase that worry,” Romer said in an interview today with Carol Massar on Bloomberg Television’s “Street Smart.”

“That’s one of the reasons why today’s report is important,” she said. “Even though the job creation was not as strong as we would have liked, it shows that steady, continued private-sector job growth, and we’re just going to have to build on that.”

Private payrolls climbed 67,000 after a revised 107,000 increase in July that was more than initially estimated, Labor Department figures in Washington showed today. The gain exceeded the 40,000 median increase in a Bloomberg News survey of economists. The unemployment rate rose to 9.6 percent as more people looked for work.

A separate report showed service industries expanded more slowly than estimated.

Today was Romer’s final day as head of the White House’s Council of Economic Advisers. Romer, 51, an architect of the administration’s $814 billion stimulus package, will return to teaching at the University of California in Berkeley. She said in January of last year that the stimulus package would stop the unemployment rate from rising above 8 percent.

Recent economic reports indicate that “okay, we did have that rough period, but these are looking more like we’re getting back on that steady path of growth,” she said.

Romer said she “would be honored” to be considered to succeed Janet Yellen as president of the Federal Reserve Bank of San Francisco. Yellen is awaiting confirmation from the Senate to become the next vice chairman of the Fed’s Washington-based Board of Governors.

To contact the reporter on this story: Joshua Zumbrun in Washington at jzumbrun@bloomberg.net;

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