BLITZER: President Obama is telling Americans the economic pain -- the economic pain, "that we are going to get through this together." A direct quote from the president.

He's welcoming some badly needed gains in the jobs market and renewing his push to create more work as the presidential election year gets closer and closer.

I spoke today with the outgoing chairman of the Council of Economic Advisers, Austan Goolsbee.

(BEGIN VIDEOTAPE)

BLITZER: Thanks very much for coming in.

AUSTEN GOOLSBEE, CHAIRMAN, COUNCIL OF ECONOMIC ADVISORS: Great to see you again, Wolf.

BLITZER: All right, 117,000 jobs created last month. In order just to stay even -- and you're an economist at the University of Chicago -- how many jobs does the country need to create every month, just to stay even, given population growth?

GOOLSBEE: Well, that's a little bit of a trick question, because it depends what happens to labor force participation. In this report, the unemployment rate went down slightly, even though it was at 117. But the best thing to say about this report is it was well above what was expected. And that's -- that's encouraging. But you don't want to make too much out of any one month's report.

And it should be obvious to anyone looking, we've got a long way to go. We're trying to deal with some fairly heavy blows that we took the first part of this year, from gas prices, from Europe and from the events in Japan.

So I'm not -- I'm not trying to make it out that this jobs report is -- is the solution to our problems, by any means.

BLITZER: No, but I've heard economists suggest that just to stay even, you really need somewhere from 125,000 to 150,000 new jobs a month. But to make a dent on unemployment, you really need 200,000 jobs a month to make a dent.

Is that a fair economic assumption?

GOOLSBEE: Well, as I say, it depends on what happens to the labor force participation and whether you put the dent in the unemployment.

BLITZER: You mean if people are just giving up looking for a job?

GOOLSBEE: Yes. If that happens, then they don't count as unemployed. So it's a little bit hard to just answer it directly.

I'll say the most important thing over an extended period is to ask, how many jobs are we creating, and particularly in the private sector? So this month was more than 150,000. They revised up some of the bleaker months of the last two rather significantly.

Overall, the last 17 months we added 2.4 million, which is a good start, but we're coming out of the deepest hole since the depression. We've got a lot more that we've got to add, and to do that we've got to get the growth rate up.

BLITZER: Because you're right, it's a long, long slog. Even if you were to create 200,000 or 250,00 jobs a month, it would take years, many years, to get back to where the United States stock market was before the start of the great recession. Is that right?

GOOLSBEE: Yes, look, I think that's accurate. But we need to start doing that.

I mean, we've got to get the growth rate up, and let's start adding jobs. This is an encouraging report. Every month I tell you, don't pay too much attention to any one report because they are variable. But we've got to see more like this and more like the ones we saw before the heavy blows of the first part of this year.

BLITZER: Private companies are making record profits, they're sitting on literally trillions of dollars, but they're really not hiring people. Why?

GOOLSBEE: Well, they were. I mean, it has been a puzzle, why they have not been both investing and hiring. And most folks -- and you see that pattern in U.S. companies, but also in companies in countries like the U.K. and other places.

To me, that makes it suggest that it has nothing to do with the policies in these countries, because the policies are very different. It has to do with them being very uncertain about how is the world economy doing and holding on to their money because they're nervous about it.

Now, previous to the slowdown at the beginning of this year, companies were hiring. That's a distinction I would like to make.

As I say, in the 17-month period, we added almost 2.5 million jobs, which is a respectable year. It's not gangbusters, but it's not bad. What has happened in the last few months is that we took these blows and the growth rate slowed down. And when growth is slow, we're not going to add any jobs.

BLITZER: Let me read to you from what one economist has now said. And I'll put it up on the screen.

"It's not just the threat of a double-dip recession has become very real. It's now impossible to deny the obvious, which is that we are now and have never been on the road to recovery."

Do you have any idea who said that?

GOOLSBEE: I do. My old teacher, Paul Krugman.

What I will say is the following: let's not just jam everything together and conflate it. Let's try to recognize where we are.

The data came out and was revised. The period in which the president comes into office was bar none the worst period that we have had in the economy since they began keeping records in the 1940s.

It could have turned into a depression. The shock that we faced was every bit as big, and in many cases bigger, than the one in 1929.

It was an achievement to avoid cataclysm. It was then followed by a fairly moderate-paced recovery where we add more than two million jobs in the private sector, and then at the beginning of this year, another slowdown. And that slowdown comes from these heavy blows, as I mentioned, that we took with gas prices and some other things.

So, I don't think that it's proper to think of this as, well, we went down and we just stagnated and nothing ever improved, because that's not true. Remember, when we came in, we were losing 800,000 jobs per month.

And we then go into a moderate growth period where we add more than two million. And now our challenge is to get past the kind of dysfunction of the beltway that was evidenced in that debt ceiling debate and get back to some of the bipartisan growth plan, things we were talking about before we got pulled into that silliness.

BLITZER: Austin Goolsbee, good look back at the University of Chicago. Thanks very much.

GOOLSBEE: Thanks, Wolf. It's been great talking to you all these months. Keep in touch.

BLITZER: We'll continue this conversation, you as a private citizen, down the road.

GOOLSBEE: That's right.