`Still a Relatively Sluggish Economy’: Kaplan

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Sept. 6 (Bloomberg) –- Harvard Business School Professor of Management Robert Kaplan discusses the August jobs report and unemployment’s impact on Fed moves. He speaks with Mark Crumpton on Bloomberg Television's "Bottom Line." (Source: Bloomberg)

? welcome back, we focus on jobs and the august employment report.

Job gains less than forecast with the addition of 169,000 workers trailing the 180,000 median forecast.

Unemployment fell to 7.3%, the lowest level since december of 2008. i spoke with robert kaplan, management professor of the harvard business school and former vice chairman of goldman sachs.

I asked him what was the most important take away from the august report?

Less than projected games, downward revisions, or the drop in the labor force participation rate?

They are all important and they point to the same thing, which is still a sluggish recovery and a relatively sluggish economy.

All of them are reinforcing of that.

We saw gains in earnings and hours worked.

Is that seasonal or the start of a trend?

I am not sure it is the start of a trend.

It might be temporary but we will have deceived.

Like everything else in this recovery, we are kind of feeling our way.

The textbook and the guide on how recovery is supposed to work haven't really applied to this one.

I think the reason is the enormous amount of leverage in the western world that we are digging out of.

Sort of the dark cloud overhanging this recovery.

The last one officials will see before this meeting.

Will the numbers give policymakers pause?

This isn't exactly is it stand to labor market improvement.

My guess is it won't change their actions on tapering.

I think they feel that they have got to begin to taper.

They are quite extended in what they have already done, and i believe that enough members of the fed board feel that they need to start, if possible, moderating this very easy money policy.

I believe you will begin to see them take a slow taper.

It is not tight money, just a slowing of the easy money.

I think you are going to see them taper.

Why the conflicting data about the health of the economy?

Housing seems to be finding its way, but jobs.

Why can't americans find work?

Several reasons.

Even though there are pockets like you mentioned, auto numbers , pockets of bright spots.

Overall, the consumer and their ability to spend is constrained.

The reason is that consumers have been deleveraging over the last two years, they are spending more, but still not that robust.

We also had some fiscal policy actions that of been contractionary and businesses continue to be very cautious.

They went through great trauma in 2008-2009. they are aware of the fact that the governments need to deleveraging and emerging markets are not as robust as they might like, and they are being careful.

I think technology also plays a role that wherever possible, businesses use technology as opposed to adding jobs.

Altogether, it means bright spots but very cautious hiring.

Is this economy weakening again?

That more headwinds are to come?

I think it is slowly improving, but the key word being slowly.

I think you are seeing improvement, but this was never going to be, in my opinion, a very robust recovery.

And the reason, again, the u.s. government is a stork we highly leveraged.

The european governments are historically highly leveraged.

The fed has countered the need to deleveraging and the need for economies to deleverage by historic easy money policy which has helped create stimulus.

The fact remains that these economies and these governments need to deleverage.

You will see sluggishness.

I think it is a good sign we are seeing improvement, but you will not see the three percent and five percent growth because we are more leveraged today than we have ever been in our lifetime.

I was wondering, any thoughts on what is going on with the fed?

We heard from the white house that the president will be delaying naming his nominee to be the next fed chairman until after the situation in syria starts to die down somewhat.

Any thoughts on who might be the next chairman?

We have heard mr.

Some others -- mr.

Summers and some others.

Reading the tea leaves, i think they would like to appoint larry summers but a are worried there will be resistance.

Certainly, the tea leaves suggest to me that they would like to appoint larry summers.

Are thanks to management professor at the harvard

This text has been automatically generated. It may not be 100% accurate.

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