that actually represents a slowdown in hiring and leaves us wondering why. are there enough jobs out there to sustain our fragile recovery? christine romans, the host of your bottom line, has been studying the numbers. break it down for you. >> i put it on a chart an graphic to show you the jobs report, ali. you make a good mount. 120,000 jobs created is a big slowdown from the pace we've seen over the last few months. 8.2% unemployment is a drop but not making people happy. you had people dropping out of the labor market, 164,000 people dropped out of the labor market. that's why the jobs number went down, unemployment went down. focus on the overall job creation. i want to show one of the things you've been watching also, the public sector jobs. only about 1,000 government jobs were lost. we lost about 6,000 the month before. a slowdown in that trend. private sector carrying things but the private sector slowing down, too. >> christine some is something we study carefully, consumer driven economy. retail sales came out last week and they were exceptionally strong, much stronger than economists were expecting. why do we see losses in retail jobs? >> it's so interesting. you saw 38,000 retail jobs lost in the month. that was a little bit of a surprise to people. the only people you saw strength in retail is home and garden centers, surprise surprise, because of the great weather. even though you've seen strength from the consumer lately, this is something overall that might be a little concern. we did see strength quickly in manufacturing,ali, 37,000 jobs created in manufacturing. that's a trend we've seen kind of picking up. i don't know how much it eats into all those jobs lost to manufacturing since the '80s really but that's something that bears watching. finally, i know you love this. this is a political number. in an election year no question, right? you look at the overall trend, the trend of job creation. here is has big job -- this is the financial crisis right here. 8.8 million jobs lost from the peak of labor market to the trough. here is census, stimulus. we thought we were coming back, then faltered. this is the slow, steady, some would say unremarkable recovery. not as strong a recovery as you'd like to see and now a little faltering at the end of it. >> 120,000 jobs, most people say we need close to 300,000 jobs a month to get back to where we were before the economic crisis. so bottom line is this is a glass a third full would you say? >> i would say so. but i want to know why. i also want to know, look, seven reports until the election. all these numbers have noise in them. sometimes they go up, sometimes they go down. a few people were telling me this week, we're due for a disappointment because jobs have been -- it has been steady. we're due for a little bit of a disappointment. you got it. i think you got that little bit of disappointment but we don't know what's going to happen next month. >> your job and mine is to give you the what. the question is why. let's bring in harvard professor, former chief economist with the international monetary fund. ken, there you go. we've laid out the numbers. you've looked at them. why? why is hiring slowing down when so many other economic indicators indicate strengthening in this economy? >> ali, honestly, i think it's hard to tell from a month's number. you're right, overall things are not so bad. they show a modest recovery. this is really tepid. i think have you to look at the longer term where the arc of the economy has been pointing to moderate growth. people are getting a little hyper excited. 200,000, 200,000, now to 300,000, 400,000. well, it's probably going to continue at this modest rate. let's hope nothing shakes it up. >> that's a good observation we've had from a number of people who said, guys, this is not 6% gdp growth. this is 2%, hopefully we get 3%. when people say they would like to see 300, 400, 500 a month that might create expectations we can't meet. diane swonk with mesirow financial, massive cuts seem to be over, we've seen few of those in the last months. private sector has been leading this jobs recovery. what is it that's holding us back from, i'm in venting a number here, 300,000 jobs added every month. what needs to happen? >> well, frankly, this is ken's area of expertise. we're still in the wake of a financial crisis and we've still got a lot of things to heal. very uneven recovery there. i think this month's number also is a little reflective. we got an extra boost from unseasonably warm weather over the last several months. there was payback. retailers that didn't hire this month actually already hired because they were selling spring stuff in january and february instead of march. some of this is a payback to the earlier gains we saw. earlier gains were extra hype because of the warm weather. sub par recovery, 2% in the first quarter, above that the remainder of the year. that's just not fast enough to create jobs quick enough to bring down an unemployment rate in a way that's substantive. it's something ben bernanke brought up as well. we have 38 months running above 8% unemployment. that ties the 1980s and the cumulative effects of that are starting to show. >> you're echoing ken's idea this is not -- these numbers we have, while we may be surprised we have slowed down to 120,000, that may be more in keeping with the economic growth numbers we see. stephen moore, editorial writer with the "wall street journal." stephen, what's your sense of these numbers? if it wasn't an election year, if you had not heard mitt romney, he's already called this a troubling report, other republicans quick to point out president obama's policies are holding the u.s. back. make the case as simply as possible as to what president obama and this administration could be doing differently that would rumt in your opinion in more jobs created. >> let me first state, obviously this is a bit of a disappointing report. i debate robert reich on your channel all the time. he's told me for years you need 150,000 a month just to keep pace with labor force growth. we fell short of that. i'm very worried. i think the most distressing statistics we've seen on jobs over the last two or three years is what we call the decline in labor force participation rate which means, ali, people dropped out. these discouraged workers are still out there. that means you don't get the out put in the economy you need. looks the unemployment rate today politically doesn't matter. what matters is what the unemployment rate is in september, october, november. politically i think you can read too much in this. if i were president obama's adviser, which i'm not, i would say maybe we should cancel the big tax increase that's scheduled for january 1, 2013, i think the economy is way too fragile to take that. i think we should have a much more aggressive energy policy. the one thing to think about, let me just add one other policy variable. we've had this kind of crack cocaine of easy money for three years and it doesn't seem to be providing the real revival of the economy most of us would expect and hope. we're three years now into a recovery. if you compare this to past recovers, it's just much lower than we should expect. we should executive 4 to 5% of growth in this phase of the recovery and we're not getting it. >> i want to take that up with the other two guests, how much of this could have been worse if we didn't have that, as you call it, the crack cocaine of cheap money, where we would be. i want a break before. diane and ken think about that. two threats outside the borders that could threaten the fragile recovery. a bipartisan effort in washington designed to help startups and small businesses. >> if these entrepreneurs are willing to keep giving their all, the least washington can do is help them succeed. >> republican eric cantor was there when the president signed the bill and aol co-founder steve case was there as well. called the jobs act jump starts our business startup. steve case is going to talk to me about what this means for innovation in america and how it creates jobs. that's all coming up on "your $$$$$." the cadillac cts sport sedan was designed with near-perfect weight balance from front to back... and back to front. ♪ giving you exceptional control from left to right... and right to left. ♪ the cadillac cts. ♪ we don't just make luxury cars. we make cadillacs. in what passes for common sense. used to be we socked money away and expected it to grow. then the world changed... and the common sense of retirement planning became anything but common. fortunately, td ameritrade's investment consultants can help you build a plan that fits your life. take control by opening a new account or rolling over an old 401(k) today, and we'll throw in up to $600. how's that for common sense? welcome back to "your $$$$$." i keep referring to this fragile recovery in the united states. i'm not just making that up. there are external factors that could have an effect on this recovery. while the jobs pictures appears to be improving in the united states that is not the case in europe. take a look at the 17 countries that use the euro. unemployment in that area. it's at the highest level since 1999. take a lo at spain, 23.6%. greece, the one that's been in the news all the time, 21% unemployment. portugal back here, 15% unemployment. ireland is at 14.6% unemployment. the three largest economies in the eu are faring a little bit better. france has just 10% unemployment. britain around 8% and germany only 5.7% unemployment. the treasury secretary tim geithner said economic fallout from the debt crisis in europe is a threat to the recovery here in the united states. but that's not the only threat. in fact, one gets the feeling europe is starting to get its act together. oil markets spooked by geopolitical attention in the persian gulf as the obama administration is moving to tighten sanctions over iran and its nuclear program. take a look at this. this is the strait of hormuz. that's iran above it. a notable oil producer. the u.s. is no longer buying oil but china and india is. the strait of hormuz is a narrow strait through which one-fifth of the world's oil passes. that straddles iran. iran has from time to time threatened that if anything goes wrong, anybody attacks iran, israel or u.s. attack iran, they may close off that strait of hormuz. now, americans are already paying 20% more at the pump for gasoline this year. let's bring the panel back in. ken joins us again. ken, when it comes to this recovery, what is the bigger threat? is it oil prices, europe, something else? is it neither? >> i think europe is the more uncertain threat. i'd have thrown in china by the way. that's the huge economy slowing down. the big picture is that there's still a lot of debt, household debt, other debt in the economy that's going to take a long time to come down. there are a lot of areas where wages are still too high. stephen said the fed has put the economy on crack cocaine, too easy, monetary policy. i don't want to say ben bernanke should be passing out candy in the schoolyard but i think a bit more inflation is what we need, that it's not that they have been too bold, they have been too timid. >> very interesting. diane, let's talk about what people think is the big threat. recent cnn research corporation poll found 78% of americans said rising gas prices caused them financial hardship. forget recovery. is there a tipping point for gas prices? is it $4.50, $5 a gallon where americans really cut back on spending and send the economy reeling because they are spending more on gas money they would have been spending at restaurants or making purchases. >> actually i think that gets into the issues we talked about earlier, unseasonably warm winter weather. we had extremely low natural gas prices and low heating bills as prices at the pump went up, which is completely different than 2008. that allowed america to keep spending. what i worried earlier, the crimp higher prices at the pump play, we have to turn on air conditioners, higher electricity and pay for that at the same time we pay higher gas prices a lot of moving parts. i underscore, ken talked about the fed not doing enough. that is something the national association for business economic survey is in complete approval with what the fed has done and setting expectations on the fed's funds rate as well on the majority of us surveyed, which is almost 300 economists actually said we approve and think the fed is doing the right things because committing to reflating an economy like this, exactly what ken wrote a book on, is exactly what you need to do at this stage of the game. >> you got the answer, two economists think interest rates should remain low. there was definitely a sense it was move on its own but clearly things can set it back. who has a leg up. conservatives spent theler part of the last two years saying obama couldn't get jobs going in america. generally he's had jobs going in america, a bit of a setback. what do conservatives do? which party has a leg up? >> this is not a hard election to predict in my opinion, ali. if people go into the voting booth they are going to ask one more question, can we afford four more years of these policies. if they are confident, feel like jobs are coming back, then barack obama will be re-elected. if they have a real sense of unease and continued sense of panic about their own finances and about gas prices and about jobs, then i think military will win. look, i just have to say, let's say the economy weakens -- i do think this is just a blip. i think we'll see some better job numbers in the months to come. if the economy doesn't get better, have you to ask yourself a question, what do we do next? what's plan b? we have record amounts of keynesian debt, borrowing money every year, record interest rates, deluge in the economy by the fed, it's like the keynesians are out of ammunition. i respect ken rogoff, i think wees one of the greatest economists in the country. ken, we have more inflation, you're going to see the gas price go to $5 orr $6 a gallon, cold prices go up. i don't see how the economy will proof. it's going to be more like in the 1970s. >> let's let ken get a word in there. ken, what do you think about that? >> it's true it will affect oil prices. housing prices are too high. it takes a long time for prices to go down. inflation another way to inflate value. same thing with wages in many parts of the economy. still too high. that's why there's unemployment. there's a lot of debt. yeah, it's not a perfect instrument. this is a once in 75 or 100 year problem. i don't really see another way out except grinding it really slowly, can you take some edge off with inflation. >> all right. dine, stephen, thanks for joining us. ken, stick around. former top economic adviser to president bush is quoting you and rogoff as "wall street journal" op-ed this week insisting we're in the midst of the worst recovery of all time. if he's right, what does that mean for your economic future? plus if the kennedys equal camelot, why is mitt romney's wealth a top target in this election? that's all coming up on "your $$$$$." 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[ dennis ] dollar for dollar, nobody protects you from mayhem like allstate. with odor free aspercreme. powerful medicine relieves pain fast, with no odor. so all you notice is relief. aspercreme. before the break i asked economist ken rogoff to stick around because he was mentioned in a "wall street journal" op-ed this week that makes that claim. it was written by the former economic adviser to president george w. bush. christine romans rejoins us as well. she had a chance to talk to him this week. christine. >> we hear again and again from obama administration stopped the economy from going into the depression. he argues president obama's policies, some of them, that are making this, in his words, the worst recovery in history. >> this hardly kept us from the great depression. what it does, even at best softened the blow. the biggest problem to my mind is what we've done by engaging in those policies is created a situation where we have very serious long-term debt issues right now. to my mind those are the most important impediments to economic growth as we look to the future. >> okay. let's ask ken rogoff. is this the worst recovery ever, ken? >> well, it's a matter of semantics, but the great depression is worse. it's hard to compare. sure, there were a few good years in the early '30s and he points to them in his article. we got to 25% unemployment first. it was bad here we got to 10. it was really staggering. frankly it didn't come back really until world war ii that things started to improve. this is the worst recovery of world war ii, typical of a deep financial crisis. the great depression, that was another animal. >> you point out the recovery from financial crises are slower than other crises. ewe were quoted and your research is what all sides of the economic schools of thought use to talk about this recovery, ken. >> well, i think my work with carmen rinehart, we certainly show the recovers are slow after a financial crisis. i think where policies really matter is affecting the arc of the economy in the longer run. how are we competing with china? where are the jobs going to come? we have a population. kids born today are going to have a 25% chance to live and be 100 years old. can we keep our retirement age where it is today? we don't seem to be able to do anything about it. state pension plans, an 8% return every year to break even. infrastructure -- there are a lot of problems that need to be worked on. >> christine, you talked to ed about some of the solutions are. he was heading towards something. >> how do we know which solutions are like. remember he was an economic adviser for george bush. we talked about sharing blame. i asked him specifically whether he in the bush white house and during a time of excessive home building whether they doesn't see it coming. should they have seen the housing crisis? >> the time would have been as early as the late '90s and going into the early 2000s when we might have thought about that. but you know, again, hindsight is 20/20. i think people at the time thought it was a good thing for the economy. in retrospect, it wasn't a good thing for the economy. >> that's why when so many people hear economists, present company excluded, talk about how we fix problems. i remember alan greenspan, frank paulison, others telling us don't worry subprime won't hurt the economy. people are a little nervous about how far we've come and how we're supposed to fix it. >> which brings us to an earlier sent men when we were talking to stephen more, where you and dine swonk suggested this is the economy, he's warning the worst thing ever. how do you deal with these things without the benefit of hindsight? >> it's very hard. the kind of situation we're in at the moment where interest rates are near zero, policy interest rates, we almost never see that. there was japan, one example. we have on our black boards, we have theoretically models of what the federal reserve should do but we don't know. a lot depends on expectations, how people are going to think about the future, adjustment processes the likes of which we've never seen. we don't know. nonetheless, my instinct is i would rare air on the side of ending up with a litt