Update: Click here for the most recent jobs statistics.
On the first Friday of every month, I update the unemployment numbers so that I can compare the unemployment rate under President George W. Bush with the unemployment rate under President Obama at that time. The genesis of this ritual began when I felt compelled to respond to some left-leaning sites that were comparing Obama’s first two years and four months in office with Bush’s last and worst economic year (the above chart shows the most recent incarnation of this narrative).
In February, the private sector added a robust 233,000 jobs in the twenty-fourth consecutive month of private sector job growth. This development is very positive news. The country also had a net employment gain of 227,000 total jobs (private and public). More importantly, 227,000 exceeds the 125,000 jobs needed each month just to keep pace with the growth of the working-age population, which is also very encouraging news.
More importantly, February 2012 is the second month in which the overall number of jobs lost during the Obama administration is lower than the number lost during the Bush administration. That said, the unemployment rate is still about a percentage point worse today than it was during President Bush’s last full month in office.
The seasonally adjusted unemployment rate remained constant 8.3% — the second lowest month of unemployment during the Obama presidency. This number remains 1.0 percentage points worse than President Bush’s last full month in office in December 2008. It also marks 37 consecutive months in which the unemployment rate has been 8% or higher in the 38th month of the Obama presidency.
That said, the unemployment rate only accounts for the percentage of the unemployed who are actively seeking employment. It does not include people who have given up on finding jobs. The month ended with more people employed at the end of February than were employed at the end of January, but the civilian labor force grew faster than the number of new employees entering the work force. Therefore, the main reason unemployment remained constant is that the numerator (the number of employed Americans) increased less than the denominator (the civilian labor force) in the unemployment equation increased.
The civilian labor force ended February at 154.9 million vs. January’s 154.4 million. 142.1 million people had jobs in February, which was an increase of about 428,000 people from January versus about 476,000 people who entered the labor force.
Both the Bush and Obama presidencies have been marked by a steady decline in the labor force participation rate. The labor force participation rate measures the number of people in the labor force as a percentage of the total working-age population. However, the labor force participation rate actually increased by 0.2 percentage points from 63.7% in January to 63.9% in February as more people reenter the labor force as the economy improves.
Putting the Numbers into Perspective
The employment statistics during President Bush’s period in office continue to look better than those under President Obama’s to date if one puts more emphasis on the overall unemployment rate. However, President Obama’s employment statistics seem better if one looks at total private sector employment. Over President Bush’s tenure, the private sector lost a net 646,000 jobs, assuming that he gets credit for all jobs lost in January 2009 and none for those lost in January 2001. I changed my methodology in response to a left-leaning blogger‘s fair point “that CES estimates represent information reported by survey respondents for their pay periods that include the 12th of the month.” Hence, any subsequent numbers for jobs created near the end of January would likely appear in the February numbers.
If one attributes the first 19 days of January 2009′s job losses to Bush, and the remaining 11 days of job losses to Obama, the private sector shed 339,000 jobs during the Bush administration (the private sector gained a net 147,000 jobs if one attributes all of January 2009′s job numbers to Obama, and all of January 2001′s numbers to Bush). Surprisingly, this number includes the 3.78 million private sector jobs lost in 2008, and an additional 839,000 in 2009 (514,000 if one attributes the first 19 days of January 2009′s job losses to Bush).
In contrast, under President Obama’s administration, the private sector has still lost a net 274,000 private sector jobs (599,000 if one attributes the remaining 11 days of job losses in January 2009 to Obama, and 1.11 million if one attributes all of January 2009′s losses to him).
Again, the point of this argument is not to assess blame on either administrations’ policy. It simply puts the numbers into perspective.
For each job the private sector cut under George W. Bush, the private sector eliminated ~0.4 jobs under Barack Obama (if one attributes January 2009′s job losses to Obama, the private sector eliminated ~7 jobs for every job it created under Bush). While the private sector job outlook has improved recently, the economy still must create 274,000 private sector jobs to break even.
While the President is almost breakeven on private sector job creation, the unemployment rate continues to remain high. It will likely continue to remain so as more people enter the labor force as the economy improves, even if the private sector continues to add jobs at similar rates. The country still has a long way to go to restoring full employment and the President is running out of time. According to The New York Times, no sitting President since Franklin Roosevelt has won re-election when unemployment was over 7.2% on election day.
And President Obama is no FDR.