Mohamed El-Erian, the chief economic adviser at Allianz, said Sunday that the federal government should not be complacent after unexpected positive economic news.
Friday’s surprise drop in the unemployment rate amid the coronavirus pandemic, El-Erian said on “Fox News Sunday,” was likely one or some combination of data manipulation, “an incredibly resilient economy” and government interventions such as the Paycheck Protection Program (PPP).
“All the data the high frequency data, they all point to a pickup. What they don’t point to however is a very sharp V [shape], more like a checkmark,” he said. “The worst thing we can do right now is relax … there’s a lot we can do right now to make sure this recovery is sustainable and that it’s inclusive and strong.”
El-Erian repeated an earlier call for future governmental measures to also address improvements to infrastructure and existing vulnerabilities, adding “let’s have very focused relief measures that focus on the most vulnerable sectors.”
Both El-Erian and Fox News’s Chris Wallace noted that Labor Department’s report, which showed that the black unemployment rate rose slightly, came at the same time as protests over the death of George Floyd in Minneapolis custody, police brutality and racial inequality have swept the nation. El-Erian pointed to the fact that African Americans were also disproportionately affected by the job losses caused by the coronavirus pandemic.
“I think if you look at the numbers, what’s very clear is that in its downturn this economy was a very unequal opportunity unemployer,” he said, adding that the improved unemployment statistics indicate “we are also an unequal opportunity employer.”
“We have a problem of income and wealth inequality but most importantly we have a problem with inequality of opportunity,” he added, saying that the phenomenon would become clear in other ways as well, such as, for example, long-term online learning giving an advantage to those students positioned to afford more reliable, faster Internet access.