U.S. labor outlook: don't expect jobs to come roaring back: expert

James Liu, Clearnomics Founder & CEO, joins Yahoo Finance Live to discuss April's disappointing jobs report and outlook for the U.S. labor force.

Video Transcript

ZACK GUZMAN: From President Biden there, saying it's too early to call this one jobs report disappointing, reiterating the need for more to be done in this recovery, flexing his push for the next step in an infrastructure proposal, the American Jobs Plan here. Also heard him talk about a state and local funds to be distributed later this month, impacting some of the job losses we've seen on the local government level and services jobs. More help is needed, though, is the main takeaway there, after the president wraps up a short speech there at the podium.

I want to bring back on James Liu from Clearnomics with us here, Clearnomics founder and CEO. And James, I mean, you just heard him talk about it. And you heard it in the follow-up Q&A, too, the idea that more of this support in benefits that are not likely-- not going to expire here and enhanced unemployment benefits weighing on the idea of workers wanting to go back to work. Are you seeing anything in this jobs report that might signal that? And what might it indicate about the recovery to come?

JAMES LIU: Well, that's right, Zack. I mean, really, the president's right in that we really shouldn't have put too much weight into one particular jobs report. It was a disappointment. But really, the bigger issue, if you take a look at the jobs recovery, is still the sectors that can recover and have recovered quickly, versus those that can't. And also, there's a serious mismatch right now between the skills that are being hired in terms of the 7 and 1/2 million open jobs and those that are still unemployed.

And so those are long-term structural trends. If you take a look at the market, the market, I think, is kind of shrugging past that now. We're in this environment where bad news is almost good news, as has been the case for many periods when the Fed is stimulating the economy. And this just reinforces that the Fed is probably not going to take its foot off the pedal anytime soon.

AKIKO FUJITA: What does that supply demand dynamic, though, you just alluded to, what does that suggests in terms of wage pressures that could continue to build up?

JAMES LIU: Yeah, it's a good question, Akiko. So basically, if you take a look at even over the last 10 to 15 years, the fact that we've had many millions of open jobs, even when many are unemployed, and this was very acute after 2008. It's very acute today. And it's that many of the areas that are hiring are in those sectors that are doing well.

And we all know those are areas like tech, you know, very growth oriented sectors that require a high level of skill. And there may be a mismatch between that and the 8 million jobs that are still lost so far today. And so, it's going to take time for that mismatch to be rebalanced. That's been the case over a decade now. And therefore, we should not expect that all these jobs will come roaring back, even if the economy continues to recover.

AKIKO FUJITA: James Liu, Clearnomics founder and CEO, appreciate you sticking around today. Always good to talk to you. Thanks so much for your time.