Spinning Jobs at the White House

It’s not at all surprising that the president is out touting today’s jobs report. We added 110,000 jobs last month, and August’s dismal report was revised away: new, more complete data show that we didn’t lose 4,000 jobs in August, we gained 89,000.

It’s really hard to diagnose the economy in the face of such large revisions, but I give it my best shot here. Summary: we’re doing better than we thought but we’re not out of the woods.

But Bush went way beyond the revised numbers, and started riffing about how great job growth has been on his watch. It just ain’t so.

This link takes you to some simple historical comparisons which look at job growth over this business cycle compared to previous ones (a cycle is the period between economic peaks). Economists like to make such comparisons across cycles, because they control for macro-conditions.

Presidents, on the other hand, especially those who preside over the longest jobless recovery on record, like to ignore cyclical comparisons and just start the jobs clock whenever jobs start growing.

Bush and co. do that all the time—that’s where the “8.1 million jobs since August 2003” comes from. The recovery began in November 2001, but the job market bottomed out in Summer ’03, so that’s where they start counting.

The amazing thing is that their record is so bad that even by these cherry-picked standards, they fail (see the second figure in the previous link).

Anyway, I grant you that 8.1 million sounds like a big number, but remember these three little words whenever these cheerleaders start throwing around job growth numbers: compared to what?

We’re adding jobs alright, and that’s much better than losing them. But job growth is historically quite slow, and that’s why most people remain unsatisfied with current economic conditions.


Comments (17)

Also, what kind of jobs? Low unemployment should create wage pressures and yet wages have been stagnant. So... those new jobs are probably not all that desirable.

thosethingswesay.blogspot.com

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And there's also the fact of: Exactly what jobs are being created?
More McDonalds, Burger King, or Janitor jobs doesn't help anyone with families get through the month.

I think that job reporting should be proportional based on the base-line poverty level versus salary. A job only earns 50% of the base-line poverty rate? Then add it as 0.5 of a job.

Jobs that earn more than the base-line poverty level should be reported still as a 1.

Of course it wouldn't be perfect. No one wants to just earn only the base-line poverty rate, especially since it's still not adequate in most cases to provide material stability.

Still, I think it would give a more even playing field with the numbers. 

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That is really a very smart idea.

thosethingswesay.blogspot.com

I'm with the jobless recovery. I'm still broke, but I started a business. Unemployment only lasts 6 months, and then you have to get a job at Wal-Mart or somewhere fun like Best Buy AND Circuit City to nearly replace your real job, now outsourced or offshored or just plain busted. All that college book learnin' went toiletward like the dollar.

I bet most job growth was in the cash part of the contracting economy, which industry was only growing due to the high-stakes Wall St.-financed loan rackets, the Republican base. It's all been a scam. Profits are up, but the economy has been in the toilet since our contested 2000 election.

We hired a million TSA screeners, narcs, spies and mercenaries to pad Bush's jobs record, and we're still stagnant.

I don't think the 'President' knows how many people there are, certainly doesn't believe they all count. How can you expect the numbers to add up?

First, a big hearty welcome back.  You've been missed (I speak with the self confidence of someone who knows the results before the poll is taken).

Second, can I ask your take on the reason for the 93,000 "correction"?  It strike me this is a pretty big oops. Is it a data collection problem or do we need better statisticians?  Is it worse in August because of a rise in wine cooler consumption around backyard pools?  Just curious.

aMike

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I've witnessed some of that "recovery" in my own family. My stepson lost a job where he had some seniority, reasonably decent health insurance, decent pay, etc. Because the economy was on the upswing (you could have fooled me), he was lucky enough to find another one, in the same line of business, within a couple of months. But. At a 30% pay cut (entry-level), worse retirement plan, less health insurance *and* with a much longer commute (4hrs round trip instead of less than 2).

Since divorce soon followed his "recovered" work-plan, he's now supporting two households (the ex-wife and children stayed in their house and he's renting. Close by, because of the children, so the commute is still long).

Faux-Noise has had a poll recently about whether people are praying for Bush and, apparently, a surprising number of Democrats do. I don't find the number surprising at all. I'm an *atheist* and I pray for Bush daily. It's called "an imprecatory prayer"

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Sum it up in 2 words: Economic propaganda...

Thanks for the kind words, aMike.

First, take heart in that revisions of that magnitude are pretty rare.  It seems to have had something to do with difficulty counting public school teachers.  The BLS initially got incomplete data from the schools and it appeared they were laying off 32,000.  When they got more complete data, it looked like they were adding 39,000, which explains most of the revision.

I think you're right that it had something to do with August, and perhaps wine coolers were also involved...

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You know what really strikes me about the two graphs? As the post-war, liberal consensus crumbled and American politcs grew more conservative, job growth got weaker with each successive business cycle. The effect is rather dramatic.

You should change your color scheme to reflect this. The 1960 line should be even darker blue, reflecting the post-war liberal consensus that created the American middle class. But 1981 should be bluish purple and 1990 reddish purple, reflecting the transition to George W. Bush's blazing, fire-engine red line of 2001.

Thanks for the link. We are red-lining, and the graphics should reflect that. But I think I'm smart, so as a Democrat I have to bicker with your point, with which I agree.

I'm not sure this liberalism is the same, so maybe the blues we use should be sky blue and blue-jeans indigo. When WWII ended, people didn't want war and were used to working together. The smaller, more focused political wars that followed created more segments. The economy grew and we all got very busy, and government work became less lustrous as other jobs became available.

As the baby boom settled, all the free time and baseline prosperity inspired an idealism in the active and vocal minority and lent momentum to minority-rights advocates, anti-war, pro-education, labor/management stuff, etc.

Then the government sent a half-million young people to the other side of the planet to keep the road free of obstacles to southeast Asian oil, zinc, rubber. That was before China, offshoring, special work visas for better-educated and more compliant Indian tech workers, etc.

I hope today's liberal lean has more to do with the way this administration pulled out a string of late-game cold war losses as China underwrites our economy, Cuba enjoys an apparent peaceful commie succession, Russia steps on the throat of European energy supplies, Bolivia, Venezuela and others in Reagan's precious Latin America turn pink, the US dollar is worth less than the Canadian dollar, the intensely stratified income demographics, the Vice President's war profiterring and religious indoctrination posing as accredited education. Welfare-to-work was probably good, but the flip side is government-subsidised business.

I hope it is apparent that the business-only representation philosophy on the R side turned out to be baseless and harmful.

Or maybe it's just me.

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Given how the Bush Administration has spun, fudged, and outright lied about empirical facts when it suited them in virtually every policy issue, I don't believe for one second any of the information coming out of any Government department dealing with economic issues.

Teachers come back every year, unlike Spring and Autumn. The dog ate his homework. Those jobs weren't created this year.

This is important to remember.

I use this test:
First, who is talking? Who is he talking to , and what does he want from them? And then, if the opposite would hurt him, assume THAT to be true.

I say 'he', since the administration has turned every office in every department into a puppet show.

That's a neat idea.  Unfortunately, I'm pretty color blind, so I'd probably mess it up.  Maybe I'll get my kid to help me...

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The 93,000 figure is a fudge factor. We used to use them in physics lab to make the results we obtained through raw data sampling, seem reasonable. It usually didn't fool the prof. Isn't there a very large number, in excess of 100,000 that is needed just to stay even with the growth in the population? So, it would seem that we are really doing little more than treading water, and that's only by counting jobs, not analyzing the quality of those jobs, or the wages they provide. What is the exact break even number?

As I point out in my report on the jobs report from last Fri (first link), you're right--job growth of this magnitude is too slow to keep the jobless rate from rising.  We need upwards of 100K, closer to 150,000/month, to absorb the growing population/labor force. 

And while unemployment is still relatively low, it is rising.  September's rate of 4.7% is the highest in since August of last year.

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