Bush Adviser Says Strong Job Market Will Buoy Economy

Edward Lazear, chairman of the President’s Council of Economic Advisers, told CNBC’s “Squawk on the Street” that the job market remains strong, suggesting economic strength and higher growth ahead.

“The most important indicator to me is the labor market,” Lazear said. “It’s very strong. If the labor market were weak, if we were seeing job growth slow down, if we saw wage growth slow down, then I would be a bit more concerned about the GDP number.”

He said business investment fell 5% in the fourth quarter of 2006, but rose about 2% in the first quarter of 2007.

“That’s extremely important for the future,” Lazear said.

First-quarter Gross Domestic Product rose an estimated 1.3%, less than the expected annual rate of 1.8%.

Lazear said the “number is not what we had hoped” but said it didn’t “raise a whole lot of concern.”

“The primary reason is that one quarter’s GDP number is not particularly significant in the overall picture,” he said. “Last year, our growth rate was about 3.1% -- that’s pretty strong growth. We think that we’ll be in the high 2% range as we continue into this year. More important, I’d say if you put this number in context with the overall economy, I don’t see this as a weak picture at all.”

He said unemployment is low, job growth remains solid, wages continue to rise, consumer spending is strong and corporate earnings are better-than-expected.

“All these things, I think, are very good, strong indicators for the future,” Lazear said.