[Christine Romans, Cnn:] 539,000 new jobs lost in April alone and unemployment rate now at a 25 year high again. You know, its cold comfort if you're one of those people, but listen up, the mass job losses may be slowing. I'm Christine Romans. Welcome to
[Your Money. Ali Velshi, Cnn:] I'm Ali Velshi. The results of the bank stress test were revealed and the administration claims the bog of uncertainty has been lifted, but is your bank really too big to fail.
[Romans:] And is it time to get back into the stock market? This hour we pose that very question to, drum roll, please. Warren Buffett.
[Velshi:] Warren Buffett.
[Romans:] Yeah.
[Velshi:] And then Rachael Ray teaches me how to cook a meal for four people for under $10 bucks total, you heard that right, a meal for four people for under $10 bucks. There is just one problem though; I don't really know how to cook.
[Romans:] We'll see. First, unemployment in this country now stands at 8.9 percent and for blacks, Hispanics and men it's even higher. Nearly six million jobs have lost since this recession began 18 months ago.
[Velshi:] So we've been talking about this economy possibly showing signs of life, but is your job any safer. Federal Reserve Chairman Ben Bernanke said this week that unemployment will remain high even after economic growth resumes.
[Romans:] Lakshman Achuthan is with us now; he comes here almost every employment report rather to help put everything in perspective. Lakshman is the managing director for the Economic Cycle Research Institute. Lakshman you told us last week that you think that this recession will end at the end of summer. Will we look at a jobs picture where you still have 539,000 people losing their job and an unemployment rate at a 25-year high. Are you seeing any signs in there that corroborate your expiration date on the recession?
[Lakshman Achuthan, Managing Director, Economic Cycle Research Institute:] Yes. In essence, first, you know, losing all those jobs means you're still in recession, let's be clear, and until we're out of it we're going to have these headline job losses. However, we are seeing in every major sector across the board that job losses are beginning to wane. The slash and burn that we were seeing a few months ago is starting to ease off and that is the first sign, a key first sign that the recession is drawing to a close. You first have to get less bad and then...
[Velshi:] Let's talk about that. We'll look at the jobs that we've lost so far in April, 539 that was thousand, by the way, that's lower than was expected and in fact the lowest since October of last year, but something that you said to me that stood out last week when we talked. You said that what happens in a recession sometimes is that we become more efficient and we pick up the slack for our laid off colleagues and that means that we can go into recovery without hiring all those millions of people who have been laid off back.
[Achuthan:] Right. So to re-gain where we were before, like we've lost 5.5 million jobs, we're probably going to lose maybe a million more before this recession's over, to regain those jobs is going to take years. That's not going to happen overnight.
[Velshi:] According to the government it could be 2012, 2013.
[Achuthan:] It depends on the pace of recovery, but certainly the first thing is to start adding jobs. We even had in the household survey which is a slightly different survey and that was a positive number this month where they actually counted jobs added and not lost to jumpy survey so we'll have to wait and see, but essentially what happens during the recession is all of these companies fire a lot of people so that they can try to become profitable. Once they become profitable they have a sigh of relief first and then they very slowly and tentatively will start hiring people as long as they can maintain their profitability and that's the road we're going to travel.
[Romans:] You know Lakshman a lot of people I talked to they get really worried about what this recovery will look like when it comes and they worry that we're going to see an America with a higher unemployment rate than we're used to. That we're going to come out of this and it won't be the way it used to be. That we're having some major transitions in the labor market. We know we're hiring for the census right now. We know we're hiring in health care, but what kind of job market do you see on the other side? Do you see this l-shaped or hook-shaped recovery where we never really get back to where it was before?
[Achuthan:] Well, no. I think we will get back. The question is how fast do we get back? We may be headed back towards the kind of cycles that we saw in the 1980s or earlier that were slightly bigger cycles. There's more uncertainty a little bit more whiplash associated with those. You can have in the very early stages of recovery, it's possible to have a recovery that's faster than you would have thought partly because the recession itself was so sharp that you have a bounce back, some pent-up demand that pushes you, you snap back as a result. So that's one thing to watch out for here, but what happens in a recession again, everybody stops making money. All these companies are not profitable. So you have to see inside the recession who becomes profitable. There's interesting and new businesses that emerge that are making money today and that are hiring people today and those will lead the economy out of recession and I mean, you also see there's some fanatic things like green technology, maybe Ford Motor Company, for example, is actually hiring people, but to make smaller cars.
[Velshi:] One quick question, Lakshman, the unemployment rate has never been equal in this country and it affects different demographic groups differently. You look at the unemployment rate in April, while it is 8.9 percent nationally, for men it's significantly higher, it's 9. 4 percent. Women, lower than the national average at 7.1 percent. Now let's give you a different breakdown. Let's show you some of the racial breakdowns we've got. African- Americans, the unemployment rate has risen to 15 percent and for Hispanics it's down a bit, but about the same, 11.3 percent. Is this because of the recession or has it been this way for a long time? I seem to think that these disparities have been around for a long time.
[Achuthan:] Yes, well the structural disparities have been around a long time. Those are not solely the result of the recession, but in this recession we've seen, for example, construction. Manufacturing, financial services, those areas get hit very, very hard.
[Velshi:] Lots of men in those areas.
[Achuthan:] A lot of guys and a lot of men in there and a lot of white men in there and in the construction you might have some additional minorities in there as well so they're getting hit from the recession particularly hard. On the way out of here you're probably not going to have a lot of demand for financial engineers, right? I hope not, but you might have actually, you know, less bad stuff going on in manufacturing and construction and that's a place where we'll probably get some job growth eventually.
[Romans:] One thing I keep pointing out about the breakdowns is if you have a bachelor's degree the unemployment rate has been rising, it's 4.4 percent now, it is less than half of what it is for someone who has just a high school education, when you look at demographics from race, sex, education from actually also parts of the country, it's a very dynamic, different picture and there are a lot of reasons built into all of those.
[Velshi:] That speaks a good reason for getting an education if you have the option to do that. Lakshman, stay with us.
[Achuthan:] All right.
[Romans:] All right. Testing the strength of your bank. Is your bank too big to fail?