00:00Francis Donald of RBC writing, there will be no shortage of growth in 26, but it will be growth
00:04for markets, not growth for the people. Francis joins us now for more. Francis, good morning.
00:09Good to see you. Good morning. That's a really strong statement. What do you mean by it?
00:13It's a strong statement, but it's factual. This is jobless growth that's coming through
00:18into America. It's growth that's driven by CapEx, government spending, big emphasis on the supply
00:24side of the economy. But that's not necessarily a bad thing. This is not an economy that requires
00:29a significant amount of job growth behind it. So effectively, what we're trying to emphasize here
00:35is that we're used to an environment where growth is a rising tide that lifts all boats, not so in
00:40this particular environment. Despite these high growth numbers that are likely to come through
00:45this quarter in the next few months, you are still going to see the issues that have weighed on
00:49Americans over the past few years persist. So relying on the growth number as a savior, a panacea for all
00:56that ails America, that's what we're indicating is a little bit dangerous in this environment.
01:00What do you think is a good jobs number at the moment?
01:02Anything above 40,000. That's our estimate of the so-called break-even employment number,
01:07although that is continuing to decline. So when we hear Kevin Hassett say, get used to lower numbers,
01:12but don't panic, an economist's take on that or this economist's take on that is, well, this is not
01:17an economy that requires a significant amount of job growth. We probably need about 40,000 jobs
01:22per month, although that number is declining. So anything above that number is going to reduce the
01:27unemployment rate. And that's how you end up with this dichotomy of slower job growth, but an
01:32unemployment rate that could decline to 4.3%. At least that's our estimate.
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