Economic uncertainty, stagnant hiring pose threat to U.S. workers: Paul Krugman

(ECNS) -- Nobel laureate in economics Paul Krugman warned Tuesday that the U.S. economy during President Donald Trump's tenure is "worse than it looks on the surface," citing persistent uncertainty and sluggish job growth, according to foreign media reports.

Paul Krugman (Photo / Screenshot from his blog)

Krugman stated that the U.S. economy is currently characterized by severe divergence, with a booming investment in the field of artificial intelligence contrasting sharply with stagnation in the rest of the economy.

He added that many U.S. citizens have "very bad" feelings about the economy, blaming "Trump’s wildly erratic policies are creating huge uncertainty, which is deterring many companies."

"First, as I said, we haven’t (yet?) seen mass layoffs — except from the federal government! — but the rate at which businesses are hiring is very low by historical standards," he said.

He pointed out that American workers are worried that if they should happen to lose their jobs, they’ll have a hard time finding another.

"And they’re right. Overall unemployment hasn’t risen that much, but the number of long-term unemployed — would-be workers who have been jobless for more than 6 months — had soared as of August, and has probably continued to rise since then," Krugman added.

Jamie Dimon, CEO of JPMorgan Chase, suggested potential systemic risks, noting a parallel between questionable loans in the opaque private credit sector and the disastrous subprime mortgage lending of the mid-2000s.

“My point for now is that even though we haven’t had a recession yet, the frozen state of the U.S. economy has already made life much worse for many workers,” Krugman said.