Welch: Jobs Numbers Assume 5% Growth Rate—‘Impossible!’
With unemployment slipping to nearly a 4-year low, you have to admit the latest jobs data looks pretty darn good.
According to former GE Chairman and CEO Jack Welch it’s too good to be true!
Welch is known for being a straight shooter who says exactly what he thinks and Welch thinks politics was behind the drop in the unemployment rate not an improved economy.
And he’s not keeping quiet.
Welch first made his skepticism of the jobs data known in afiery Tweet which read, “Unbelievable jobs numbers… these Chicago guys will do anything… can't debate so change numbers.”
The 144 character or less message ignited quite a firestorm of controversy. And on The Kudlow Report Welch explained that his skepticism stems from personal research he’s been doing; that is sifting through data from over a dozen companies.
“I’ve been reviewing 14 businesses all week, and not one of them is showing stronger growth in the third quarter than they did in the second."
Because of his research, Welch concludes that, "It’s impossible that we can be running at a 5% GDP growth rate which is what this (7.8%) number is implying.”
Welch also explained why he’s being so vocal on the issue.
“The President is talking up this 7.8% unemployment rate –the election is too important to let one number decide it.”
Dig down into the jobs report, Welch says, and there are many data points that were quite negative, they're just getting buried by the drop in unemployment.
The Obama administration has rejected the charge that it was manipulating data.
Secretary of Labor Hilda Solis, appearing on CNBC, said any conspiracy theory about the latest jobs number is "ludicrous."
"I'm insulted when I hear that, because we have a very professional civil service organization. These are our best trained and most skilled individuals," she said on "Squawk on the Street."
Typically Larry Kudlow isn’t one to defend the Obama administration but he, too is a straight shooter and told Welch point blank, “I’ve worked in the White House under Reagan and there’s no way those numbers can be manipulated. Maybe the model is flawed but you can’t touch those numbers.”
"Perhaps the sharp improvement in the unemployment rate one month before the election was a total coincidence," Welch conceded but added “this is probably the most important election of my lifetime and it shouldn't be decided by one number.”
"The Kudlow Report" airs weeknights at 7 p.m. ET.