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First on CNBC: CNBC Transcript: National Economic Council Director Larry Kudlow Speaks with CNBC’s “Squawk on the Street” Today

WHEN: Today, Friday, December 4

WHERE: CNBC’s “Squawk on the Street”

Following is the unofficial transcript of a CNBC interview with National Economic Council Director Larry Kudlow on CNBC’s “Squawk on the Street” (M-F 9AM – 11AM ET) today, Friday, December 4th. Following is a link to video on CNBC.com:

https://www.cnbc.com/video/2020/12/04/white-house-economic-advisor-larry-kudlow-weighs-in-on-the-november-jobs-report.html.

All references must be sourced to CNBC.

CARL QUINTANILLA: The director of the National Economic Council will talk about the jobs’ number this morning. Larry, good morning. Happy Friday, good to have you back.

LARRY KUDLOW: Thank you. Hello folks, how are you?

QUINTANILLA: We're doing well, taking stock of the number today. Charles Evans of the Chicago Fed is on the tape now saying it's a little disappointing. Would you agree?

KUDLOW: I suppose so. It came a little bit under consensus, not a lot but a little. I really liked the 6.7% unemployment rate and I would note, by the way, if you look under the hood of this thing, the biggest declines in unemployment were minority groups. That's the toughest nut to crack but they're really coming down, African Americans, Hispanics, Asians and also, not a minority group because they're really a majority, but women's unemployment came down. Those are the real highlights of this thing and as you know, 6.7%, CBO and others didn't expect it, single digits, till well into 2021 so it's a good report. And I just make one other editorial comment before we get into it back and forth. You know, you can't judge the entire economy by a number that comes in, slightly below consensus. You have real, real strength in the PMIs and manufacturing and construction, in new purchase mortgage applications, automobiles are very strong, capital goods are coming on very, very strong. I think the Q4 for what Atlanta GDP now Atlanta Fed is 11%, that's their number, I don't know if we'll get there but I'm just saying that the economy’s still pretty strong, even with various COVID risks out there.

QUINTANILLA: Yeah so Larry you're on that point, your long-standing view has been that a sharp recovery, V-shaped recovery, not predicated on further stimulus. You still hold that view and what does that say about the debate that's going on right now?

KUDLOW: Well, look, I do hold that view and I do think it's a strong V-shaped recovery. But I've also said, any number of times in recent months, that a targeted assistance plan from Congress would be very helpful. And I know that the, the parameters seem to be closing a bit. I know that Senator Mitch McConnell is talking to House Speaker Pelosi. Senator McConnell's a little more optimistic than he has been, there's no deal yet. The numbers are getting closer, there are some policy differences but Carl, my take really all’s, I don't know, late summer and autumn for this discussion, is we should provide some additional payouts for unemployment assistance. I think that's very important. Secondly, I think we should pay out additional extensions for the successful small business PPP program. I think you've got to put some money into the airlines, and I think you've got also put some money into the restaurant, small restaurant, small business so that it may be covered by PPP, maybe you can have some tax deductions. And anything to do with COVID and schools, I mean we've got to keep the schools open. So, we've always been willing to spend money. President Trump is, I spoke to him yesterday about this, he's happy to provide assistance in these key targeted areas and we want to keep the economy open. I mean we should talk about the COVID story, but we must keep the economy open, we must keep the businesses open, we must keep the schools open. This is very doable. And you know, I still think we're in pretty good shape, despite the fact that we came in a wee bit below consensus on jobs today.

JIM CRAMER: Well Larry, first I want to congratulate you and thank you for your service for our country.

KUDLOW: Thank you.

CRAMER: You've done an admirable job and I know you're in there working hard every single day. And we appreciate everything you do.

KUDLOW: Thank you, Jimmy. Appreciate it. Really do.

CRAMER: When I listened to the things that you're talking about, the targets, all you clicked on every single box. It's everything it needs to be, the business insurance, interrupted business not the people's fault, successful businesses that are going under. It will be really hard, correct, if we let them go, for them to restart. It would be far better and cheaper, just to keep them afloat somehow until everyone gets the vaccine, true?

KUDLOW: Yeah, I really agree with that point of view. You know, there's a way to do this that is not going to spend trillions and trillions of dollars. You've got unused, unspent funds, Jimmy. The PPP program left on the table, I believe something like $135 billion, as the Treasury Department has basically in its Exchange Stabilization Fund, which was used as the equity for the Fed facilities. Even though some of that may expire at the end of the years, Secretary Mnuchin has said due to the law, nonetheless, you've got a $450 billion nut there, that was in the CARES Act that is available so if you, just in ballpark numbers, take your $450 and your $135, there’s another $25 billion that was used by the Fed to help the PPP which is no longer necessary, that's $600 billion that could be repurposed if you will, re-appropriated. I wanted this, I've argued this for many, many months, just take that money and get on the horse, plus up Employment Assistance by, you know, let's say 300 bucks a week, extended out. I don't, I don't want to negotiate here but I'm saying at least several months maybe till the end of the first quarter, and of course, help is on the way. The vaccines are coming. The high priorities will be couple of weeks. You know the frontline workers for example, people with preexisting conditions, old guys like me. You're going to get about 20 million by the end of December, another 20 million in February and depending how the two leading vaccines maybe there's a third coming on stream, you're looking at 100 million or so by the end of March, according to Vice President Pence’s task force, which I sit on and met earlier this week so help is on the way. And let's provide an assistance bridge, let's do it in a very targeted way and, and we'll be okay because the fundamentals of the economy look pretty good. You see the behavior of the stock market. You see earnings are being raised higher. Nobody knows that stuff better than Jim Cramer that's for sure. And it's, it's just you know, I wish we had a little more private sector jobs today, but it'll come on stream. The continuing claims are, are falling by enormous amounts so I'm kind of still optimistic, but I'd like to see Congress act.

CRAMER: Well, Larry, I want to, it was a privilege to work with you on “Kudlow & Cramer” and thank you for the kind words about the stock market. I agree that yes, we have to worry about some of these big businesses like the airlines, but you and I are looking at this point in stock market, this market and the bond market will actually let the private sector pay for the growth of the airlines and get them back on their feet. Do you think that we should just really be small, medium-sized business and let the stock market and the bond markets take care of, of some of the larger companies?

KUDLOW: Well, that's an interesting policy point, Jimmy. That, that is an interesting policy point, maybe so, maybe so. You know a whole lot more about the airline companies than I do, I did talk to them on a regular basis, but you know more about the income and balance sheets. I don't know that I can answer that. What I do know is Speaker Pelosi’s team is you know now embracing a lower number. I don't think that's the total issue because it's the policies inside the number but they have come down. Senator McConnell, who’s obviously a key player, he has said publicly that compromises are possible, he's softened his language quite a bit. Secretary Mnuchin, the rest of the White House, we're all talking to the Majority Leader's office, we’re talking to Kevin McCarthy's office on the GOP side. So, talk is good and we may be moving forward. I can't promise anything this morning. I’m just saying that the targeted approach is I think the best way.

QUINTANILLA: Larry, it's always good to have you on jobs Friday. We'll talk to you soon.

KUDLOW: Thanks Carl. Appreciate it very much. Thanks Jimmy.

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