Roubini on expected US unemployment figures

 1. Wide of Nouriel Roubini, New York University Professor of Economics entering news conference
2. Roubini sitting down
3. SOUNDBITE (English) Nouriel Roubini, New York University Professor of Economics:
"Well, the labour market conditions are weak in the US and they''ve been weak for a while, and since the economic growth is well below potential, unemployment rate is going to go higher and the only reason why the unemployment rate has not gone higher in the last few months has been that, in spite of weak job creation, enough people have become so discouraged that they''ve exited the labour market so they don''t even show up as unemployed people."
4. Cutaway Roubini speaking
5. SOUNDBITE (English) Nouriel Roubini, New York University Professor of Economics:
"And if you look not at the unemployment rate, but the employment ratio - the ratio of people unemployed as a fraction of the population - that ratio is now at its 20-30 year low. So every measure of the labour market is now suggesting weakness and I would expect that as economic growth is below potential the labour market is not going to create many jobs."
6. Wide of news conference
7. SOUNDBITE (English) Nouriel Roubini, New York University Professor of Economics:
"Every firm said in a crisis ''in order to survive, thrive and regain profits I have to cut costs, especially labour costs.'' My labour costs are somebody else''s labour income, consumption and demand. So individual actions that are rational like ''I need to survive and thrive'', lead to a macro effect in which the destruction of labour jobs and labour income makes the recovery weaker, doesn''t create enough consumption and then makes the risk of a recession more severe."
8. Cutaway of journalist
9. Wide of news conference
STORYLINE:
American economist Nouriel Roubini expressed his belief that the unemployment rate in the US is going to grow higher as US employment figures are at the lowest in the past 20 to 30 years.
The New York University economist, known as Doctor Doom since predicting the global financial crisis, said on Friday that the US labour market conditions are weak which suggests unemployment rates will grow higher.
"Since the economic growth is well below potential, unemployment rate is going to go higher," Roubini told a news conference after the opening of the Ambrosetti forum on Lake Como in Italy.
As the US Labour Department is poised to release figures for unemployment and the jobless rate in August, Roubini explained that the labour market in the US has entered a vicious circle which will make recession more severe.
"Every firm said in a crisis in order to survive, thrive and gain profits, I have to cut costs, especially labour costs, my labour costs are somebody else''s labour income, consumption, and demand, so individual actions that are rational like ''I need to survive and thrive'' lead to a macro effect in which the destruction of labour jobs and labour income makes the recovery weaker, doesn''t create enough consumption and makes the risk of a recession more severe." explained Roubini.
"My labour costs (referring to businesses) are somebody else''s labour income, consumption and demand. So individual actions that are rational like ''I need to survive and thrive'', lead to a macro effect in which the destruction of labour jobs and labour income makes the recovery weaker," he said.
The US Labour Department is set to announce figures for employment and the jobless rate in August later on Friday.


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 Nouriel Roubini is an American professor of Economics at New York University`s Stern School of Business and chairman of RGE Roubini Global Economics