NEC Director Kevin Hassett Talks Jobs Data & Inflation

Summary

---

Podcast Summary: NEC Director Kevin Hassett Talks Jobs Data & Inflation

Podcast: Bloomberg Talks
Host: Bloomberg
Guest: Kevin Hassett, White House National Economic Council (NEC) Director
Date: June 5, 2026

---

Episode Overview

This episode features a timely and data-driven conversation between Bloomberg’s host and Kevin Hassett, director of the White House National Economic Council, in the wake of unexpectedly strong U.S. job numbers for May 2026. The discussion centers on the implications of the new jobs report for inflation, the impact of recent economic legislation (“the big beautiful bill”), growth in different employment sectors, and U.S. policy responses to current global events. Hassett provides deep insight into how these factors interact and offers the administration’s perspective on the economy’s trajectory.

---

Key Discussion Points and Insights

Robust Job Creation and Policy Drivers

• Surge in Job Numbers: The U.S. economy added 172,000 jobs in May, surpassing all estimates.

• Policy Foundation: Hassett attributes the job boom to President Trump’s efforts to attract global investment and supply-side reforms such as:

  • The “big beautiful bill”
  • No tax on tips
  • No tax on overtime

• Equipment Investment: He highlights surging equipment investment as evidence of a manufacturing and factory-building resurgence.

  “People are building factories, creating jobs, creating the golden age... That is a logical supply side response to the big beautiful bill, the no tax on tips, the no tax on overtime and the rest.” — Kevin Hassett (00:52)

• Labor Force Composition: Hassett rebuts prior skepticism about immigration constraints, noting native-born Americans are entering the job market in large numbers due to strong wage growth.

Inflation, Fed Policy, and Energy Shocks

• Inflation Concerns Addressed: Despite low unemployment (4.3%) and strong jobs data, inflation stands at 3.8% (PCE). Hassett argues these inflation readings are the transient result of oil price shocks, not lasting pressure.

  “What you need to do is look at the impact of oil price shocks on core inflation. The history...is that they’re temporary, they don’t lead to lasting inflation...” — Kevin Hassett (02:46)

• Fed Policy Advice: Hassett cautions the Federal Reserve against overreacting with interest rate hikes, drawing parallels to Alan Greenspan’s 1990s approach.

  “You could have high growth without having runaway inflation. It’s not a Phillips curve event at all.” — Kevin Hassett (02:46)

• Global Events: The Gulf situation (with Iran) is cited as a key driver of temporary oil price disruptions, which Hassett forecasts will dissipate once the geopolitical risk is resolved.

Sectoral Breakdown: Manufacturing, Construction, and Government Jobs

• Manufacturing Outlook: Although manufacturing jobs have not yet surged, construction jobs are “way, way up.” Hassett considers construction a leading indicator for future manufacturing growth, with more factory jobs expected as new facilities come online.

  “People are racing to build the factories and then once those buildings are up, then they’ll put the machines in and create the jobs...” — Kevin Hassett (04:51)

• Government Employment: The uptick in government jobs is mostly at the state and local levels and is likely seasonal, offsetting reduction at the federal level (over 300,000 cuts claimed), which Hassett frames as a source of future taxpayer savings.

  “The federal government have cut federal government employment by more than 300,000 workers. And that’s like tax savings...” — Kevin Hassett (05:46)

• Healthcare, Food, and Accommodation: Job growth in these sectors, typically lower wage, is noted. Hassett points out that real wages have increased across the board.

Wage Growth and the “K-Shaped” Recovery

• Wage Gains: Since Trump took office, average real wages are reported to have risen by $3,000. Recent wage growth is cited at 3.4%, just under current inflation.

  “Real wages are going up on average about $3,000 since President Trump took office.” — Kevin Hassett (05:46)

• K-Shaped Recovery: Some concern is expressed by the host regarding growth in lower-wage sectors, but Hassett reaffirms broad-based wage increases.

---

Memorable Quotes

• On economic surprise:

  “The Trump economy is surprising Wall Street analysts over and over again and they need to maybe think about getting the supply side of their model fixed.” — Kevin Hassett (01:50)

• On inflation and the Fed:

  “My advice to the Fed...watch the numbers because what you’re going to see is that with a big supply side boom that you could have high growth without having runaway inflation.” — Kevin Hassett (02:54)

• On global tension and oil:

  “Once we successfully take away the option for Iran to build a nuclear weapon...the global markets should understand that risk premia are going to be much, much lower going forward.” — Kevin Hassett (03:56)

---

Timestamps for Important Segments

• [00:24] — Opening: Introduction of Hassett and strong jobs report
• [00:52] — Hassett explains the supply-side policy effects and rising investment
• [02:17] — Discussion of inflationary risks and Fed interest rate debate
• [03:45] — Geopolitical backdrop: Gulf tension and oil markets
• [04:34] — Deep dive into jobs by sector: Construction as a leading indicator
• [05:22] — State/local vs federal government jobs
• [05:46] — Real wage growth and economic impact on workers
• [06:28] — Clarification on cumulative wage gains

---

Conclusion

The episode highlights a period of “surprise” economic growth attributed to deliberate supply-side policies, argues for measured inflation responses in the face of temporary shocks, and projects optimism for continued employment gains across sectors. Kevin Hassett maintains an upbeat, triumphant tone throughout, positioning the latest data as validation of the administration’s agenda while urging calibrated policymaking from the Federal Reserve.

---

Transcript

[Indiana University Narrator]

Indiana University strengthens tomorrow's workforce with practical real world experience. IU grads make a difference in your community, serving as teachers, nurses and engineers who rise to tomorrow's challenges and meet them. Learn more at iu. Edu Impact

[Kevin Hassett]

Bloomberg Audio Studios Podcasts Radio

[Bloomberg Host]

News In May, the US economy added 172,000 jobs, far exceeding all estimate. Let's bring in White House National Economic Council Director Kevin Hassett. And I mean frankly, congratulations are in order. Kevin, this is an unambiguously good jobs number, an upward revision in the last month. Does it foreshadow the risk of broadening inflation?

[Kevin Hassett]

No, absolutely not. And in fact it's something that is a great question. The bottom line is that what's going on is because the President has recruited from companies around the world 18 trillion dol of new investment. And we're seeing if you looked at the advanced herbals numbers, you know, equipment investment through the roof up 3%, you know, in March, one of the biggest months we've ever seen that people are building factories, creating jobs, creating the golden age, the boom. That is a logical supply side response to the big beautiful bill, the no tax on tips, the no tax on overtime and the rest. And so we're seeing the benefit of that. And you might recall that when, you know, we were talking about this a year ago, there are a lot of naysayers who said, well, we can't possibly even have have positive jobs numbers because of our immigration policy. But the fact is that we're getting positive jobs numbers because we've got high wage growth and native born Americans are rushing into the labor market in droves. And so that negative story is gone. And finally got to say we really love going through the Bloomberg data. And we have this thing that I like to look at which is the probability distribution of all the forecasts for the jobs number before it comes out. And when I looked at it after I got these numbers, I saw that the very, very top person was by about 40,000 jobs, which shows that the Trump economy is surprising Wall street analysts over and over again and they need to maybe think about getting the supply side of their model fixed.

[Bloomberg Host]

It does surprise people to the upside for sure. I hear a lot of, I have heard since it passed, a lot of positivity about the big beautiful bill and the economic growth that it would create. We see 172,000 jobs. We see unemployment at 4.3% but we see inflation at 3.8% on the PC. So it looks kind of like too late. Powell was right on Time and now the market is pricing in a hike. Is that wrong?

[Kevin Hassett]

Yeah, I think that's, that's terribly wrong. The bottom line is that what you need to do is look at the impact of oil price shocks on core inflation. And the history of it is that they're temporary, they don't lead to lasting inflation, that people see through it and don't adjust upward their inflation expectations. And so my advice to the Fed, and I certainly respect their independence and I'm really thrilled to have a talented person like Kevin Worsh there watch the numbers because what you're going to see is that with a big supply side boom that you could have high growth without having runaway inflation. It's not a Phillips curve event at all. And the last time this happened was the 90s when Alan Greenspan saw through that and gave us some of the best years we ever had. And I think that we have that opportunity right now if the Fed pays close attention to the data and thinks about why it keeps surprising on the upside, them especially, and surprising on the downside on inflation. I mean, absent the Gulf issue, you know, the inflation basically would be complete, completely under control right now.

[Bloomberg Host]

How soon do you expect that to be wrapped up? Because that's almost completely within our power. Right. We went in there maybe at the behest of Israel, but it was our decision to do that.

[Kevin Hassett]

Well, the President will make the call on that. I mean, negotiations are ongoing and I'm not a forecaster for when it's all going to end. But the bottom line is the global markets should understand that risk premia are going to be much, much lower going forward once we successfully take away the option for Iran to build a nuclear weapon. Know, if you look at the sort of crazy actions that they're taking in the straits, you know, even attacking Chinese boats, for goodness sakes, that you can see how terrible it would be for the world if they had ballistic missiles and nuclear weapons. And President Trump thinks that's unacceptable. And you know, of course there's a short term disruption in oil prices, but we expect it to be over soon.

[Bloomberg Host]

Let's get back to the jobs picture because you mentioned the investment in equipment, which makes sense following on the legislation that you passed. Are we going to see manufacturing jobs come back to the US Economy? Because we don't really see job creation in the goods producing sector yet.

[Kevin Hassett]

You know, it's, it's inching up. But what, what is going way up is construction. And remember in the big beautiful bill that President Trump did something that was really Quite clever where he said for four years we're going to allow people to expense factories. And so what's happening right now is that people are racing to build the factories and then once those buildings are up, then they'll put the machines in and create the jobs and so on. And construction employment is way, way up. And we think that that's like the leading indicator for what's going to happen to manufacturing work over the next year or so.

[Bloomberg Host]

We have seen an uptick in government jobs, which I thought was surprising. I figured we were going to go the other way, but we added 54,000 there and an uptick in hiring in a lot of health care services, food and accommodations. Those are lower paid areas. Are you worried about the lower half of the K?

[Kevin Hassett]

Well, what we're seeing is that wages across the board, real wages are going up on average about $3,000 since President Trump took office. And so, you know, right now the jobs, the government jobs that you talked about were really state and local jobs. And there tend to be kind of seasonal patterns in those things that aren't completely captured by seasonal adjustment. And so we have a lot of teachers that took off for the summer and maybe took a job at the BOARDW and so on. That kind of thing is. And then it gets offset in September is probably what's going on because it's all state and local. We, the federal government have cut federal government employment by more than 300,000 workers. And that's like tax savings that is going to accrue to the benefit of the American people for a long, long time.

[Bloomberg Host]

We did. I was just looking at the wage growth, 3.4% and PC was 3.8%. So how do you factor higher real wages?

[Kevin Hassett]

You're looking at the latest number and I can send you an email, but we've aggregated it through since when Trump took office and the number was 3,000 as of a speech that we wrote for him a day or two ago.

[Bloomberg Host]

All right, well, that certainly is good news for the workers in this country. Kevin, great to get some time with you. Really appreciate joining us. Kevin Hassett is the White House National Economic Council director. Talking to us on a day when the jobs numbers just came in far higher, as he pointed out, than the highest estimate.

[Indiana University Narrator]

Preparing for tomorrow's careers requires forward thinking education. Indiana University graduates are degrees above the competition, building on strong foundations to create new possibilities that make a difference where you live. From teachers and nurses strengthening communities to engineers advancing microchip research, Indiana University is investing in tomorrow's workforce. Through career ready training. Learn how IU is driving economic growth at iu. Edu Impact.

[Kevin Hassett]

Yes you can. A five minute quick and easy calorie burning workout. Give it a try. Come join our sweat sesh on TikTok.