Kevin Hassett says jobs numbers are down 'because we don't have this massive inflow of immigrants that are working'

Some economists might find the latest jobs numbers underwhelming, especially compared to the eye-popping results from the early post-pandemic years — but Kevin Hassett, the director of the National Economic Council, went on CNBC (1)'s Squawk Box on Monday (2) to argue the numbers look worse than they are because the Trump administration has cracked down on immigrants, who previously propped up payroll reports.

"The jobs numbers right now have been blockbuster," Hassett said. "The breakeven job number is a lot lower than it used to be because we've tightened the border. And so 120,000, 130,000 this year is sort of like 200,000 two or three years ago because we don't have this massive inflow of immigrants that are working."

The April jobs report (3) had something for both sides of the argument. Job creation topped expectations for the month, with nonfarm payrolls up by a seasonally adjusted 115,000 for April, but average hourly earnings came in lower than expected — and the month also saw a noticeable drop in the labor force and tech-related jobs.

How the 'breakeven' jobs number works

Hassett's perspective on the jobs numbers is based on the breakeven, or the number of jobs the economy must add each month to keep the unemployment rate from drifting up. When immigration rises, the breakeven climbs. When it slows, the same payroll figure starts signaling a tighter labor market.

For historical scale, a Federal Reserve staff note published last month (4) noted the breakeven averaged around 80,000 a month in the 2010s and ran as high as 185,000 in the 1970s, when baby boomers and women were flooding into the workforce.

What economists are still debating

Some economists have offered partial support for Hassett's framing. Chicago Fed President Austan Goolsbee told (5) CNBC (6) on Friday the labor market has been "pretty much stable for a year, year and a half," calling it as stable "without being good." Dan North, senior economist for North America at Allianz, told CNBC the report was "fairly bulletproof this month."

Others are not sold. Joseph Brusuelas, chief economist at RSM US, pushed back earlier this year (7) on attributing softer hiring to demographics, calling it "an attempt to distract from immigration and trade policies." Kory Kantenga, LinkedIn's head of economics for the Americas, told CNN (8) that "half of the job gains came from retail and transportation and warehousing; those are sectors that do not consistently add jobs."

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CNBC (1),(2),(3),(5),(6); U.S. Federal Reserve (4); The Hill (7); CNN (8)