Bush vs. Obama: Unemployment (September 2012 Jobs Data)

Change in Total Private Employment (in thousands), Source: U.S. Bureau of Labor Statistics

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 September, the private sector added only 104,000 jobs in the thirty-first consecutive month of private sector job growth. This development is somewhat negative news. The country had a net employment gain of only 114,000 total jobs (private and public). Moreover, 114,000 is below the 125,000 jobs needed each month just to keep pace with the growth of the working-age population, which is discouraging.

September is the ninth month in which the overall number of jobs lost/gained during the Obama administration is better than the number lost during the Bush administration. It is also the fifth month since the number of net private sector jobs gained or lost during the Obama administration turned positive. That said, the unemployment rate is still five-tenths of a percentage point worse today than it was during President Bush’s last full month in office, and it is the same as what it was when President Obama first entered office. In other words, the unemployment rate in all 45 months of Obama’s presidency has been higher than that of any single month in President Bush’s 8 years in office.

The seasonally adjusted unemployment rate declined by three-tenths of a percentage point to 7.8% — the lowest month of unemployment during the Obama presidency. This number remains five-tenths of a percentage point higher than President Bush’s last full month in office in December 2008. It also ends the string of 43 consecutive months in which the unemployment rate has been 8% or higher in the 45th month of the Obama presidency.

Unemployment Rate, Source: U.S. Bureau of Labor Statistics

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 873,000 more people employed at the end of September than were employed at the end of August. This figure is nearly 8x the number of nonfarm jobs the government reported were added in September, which is one of the key drivers behind charges that the unemployment figures seem fishy.

The discrepancy between the change in the number of people employed and nonfarm payrolls stems from the fact that households report the employment number, while businesses report nonfarm employment. While these numbers do seem inconsistent, the ratio between the change in employed and the change in nonfarm payrolls has averaged 0.7x since 1948 with a standard deviation of 10.6x. In other words, this ratio is still within one standard deviation of the mean. The only way the administration could game the numbers would be to encourage unemployed union members to lie when people survey them. Such a large conspiracy would be nearly impossible to cover up, so claims that the books have been cooked seem to be a bit overblown.

The civilian labor force increased slower than the number of new employees entering the work force increased. Therefore, the main reason the unemployment rate improved is that the numerator (the number of unemployed Americans) in the unemployment equation decreased by a larger percentage than the denominator increased (the civilian labor force). Put simply, the unemployment rate improved because the number of people employed increased – a very positive development.

The civilian labor force ended September at 155.1 million vs. August’s 154.6 million. 143.0 million people had jobs in September, which was an increase of about 873,000 people from August versus about 418,000 people who joined 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. The labor force participation rate improved by one-tenth of a percentage point from 63.5% in August to 63.6% in September.

Labor Force Participation Rate, Source: U.S. Bureau of Labor Statistics

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).

Change in Total Private Employment (in thousands), Source: U.S. Bureau of Labor Statistics

In contrast, under President Obama’s administration, the private sector has gained a net 514,000 private sector jobs (a gain of 189,000 if one attributes the remaining 11 days of job losses in January 2009 to Obama, and a loss of 325,000 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 gained~0.8 jobs under Barack Obama (if one attributes January 2009’s job losses to Obama, the private sector eliminated ~2.2 jobs for every job it created under Bush). The economy would need to destroy 1.16 million private sector jobs for Bush to break even with Obama (not accounting for the 125,000 jobs that the economy must create each month just to keep pace with population growth).

While President Obama has surpassed President Bush on private sector job creation, the unemployment rate has remained persistently 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.

About Sean Patrick Hazlett

Conservative clean energy crusader, national security hawk, financial analyst, engineer, and former military officer.
This entry was posted in Business, Finance and Economics, Media, Policy, Politics and tagged , , , . Bookmark the permalink.

32 Responses to Bush vs. Obama: Unemployment (September 2012 Jobs Data)

  1. Pingback: Bush vs. Obama: Unemployment (July 2012 Jobs Data) | Reflections of a Rational Republican

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  18. Jeff Fordham says:

    Sean says :”It does not include people who have given up on finding jobs.”

    I was taught at an early age that if you don’t work- you don’t eat, you lose your home and find yourself on the street. With all these millions who have given up on ever finding a job and not having a way to pay their bills etc. etc………I would then expect the rate of homelessness to be sky rocketing like it did when Reagan shut down all the federally supported mental institutions back in 1981-82 which precipitated in hundreds of thousands, if not millions of helpless non working mental patients suddenly appearing on the city streets of America. Now that was a noticeable increase as I saw it with my own eyes !. ……..Yet those numbers pale in comparison to the amount of people who have been “leaving the workforce” for the last 3 years…..because they have “given up” from the lack of available jobs as the current Republican talking point is stated.

    I would really like to know the secret of how these millions who have “given up” are managing to survive with zero income for so long……….or perhaps there is more to the “drop out” rate than meets the eye? Like the fact they don’t take into account anyone who is working part time or working under the table ? Yes, I am sure there is some of that going on. Or perhaps its the fact that is never stated in these “drop out” sound bites from Republicans that 10,000…. 65 year old people retire daily or “drop out” of the workforce. Yes thats right……….10,000 per day @ 30 days is …….(not calculated in Romney math) ….. 300,000 people leaving the work force every single month in America. That is 3.6 million per year dropping out not from Obama’s horrible policies, but from a normal attrition rate. How much of that number is used to prop up the talking point ?? anyone care to guess?

    I can say only this…………..if it were John McCain or whoever from the bubble world of the GOP, and the job numbers were at the rate we see today……………Republicans would be blowing horns and banging pots about how he saved America from the crash, and that things were getting better albeit slowly. The party of no seems to be very disingenuous.

    Let me quote conservative “Forbes.com” from a few months back………but is quietly ignored by most of the blow hard Republican pundits.

    “Baby boomers, the generation born between 1946 and 1964, started reaching the conventional retirement age, 65, last year. That would certainly have many of them leaving their jobs and heading toward the doors. It’s their exit from the labor force that could explain why the labor-force participation rate has fallen from 66% at the end of 2007 to near 63.9% today, a group of Barclays Capital economists argue in a new report.”

    http://www.forbes.com/sites/abrambrown/2012/03/02/baby-boomers-not-recession-lowering-labor-force-participation/

    Pew research on daily baby boomer retirement rate of 10,00 per day every day for the next 19 years !

    http://pewresearch.org/databank/dailynumber/?NumberID=1150

    • Jeff,

      Of course that number includes baby boomers, but it also includes people who have given up looking for jobs. How do they survive you ask? Well, until recently they could rely on 99 weeks (nearly two years) of unemployment insurance. When the checks stop coming from that source, they fall out of the labor force, but food stamps can sustain them indefinitely. As we all know, 47 million people are currently on food stamps, up from about 30 million from the Bush administration. The healthcare law allows children to stay on their parent’s plan until they are 26, making it easier for the younger unemployed to survive by simply living with their parents.

      Moreover, at least an additional 125k people join the labor force each month because of population growth. Since Obama took office, the employment-population percentage fell to between 58% and 59% and has hovered there since.

      • Jeff Fordham says:

        Food stamps can sustain an individual and or family indefinately? That does not pay your rent or mortgage, nor does it put gas in your car or pay for your health insurance and a host of other daily expenses. And I like how you through the 47 million on food stamps out there…….yeah that was a GOP standard talking point a few weeks back when it came out in the press. Lets take a look at that a little more………shall we? Yeah the rate is highest its ever been….. but why, pray tell……did the food stamp rate almost double under George Bush’s watch (after declining under Clinton) from 16 million to 30 million by 2009? I mean those tax cuts and boom economy were supposed to raise all boats …….right? Then the economy goes off a cliff under a Bush watch…..and as a result the food stamp rate goes into the stratosphere but the extra 17 million in increase in the last 4 years is about on par with 8 years of Bush. I don’t see this as Obama’s fault especially when the party of NO has had only one goal.

        The employment rate participation at 58.7 % is about where I would expect it to be as all business is cyclical and we happen to be in a rather large rut thanks to the deregulation of the banking industry and the insane spending of the last 12 years. The last time the participation rate for employment was this low was November of 1983 under Ronald Reagan where it stood at 58.7% and we managed to pull out of that just fine……..even after the Reagan, Bush senior, and Clinton tax increases ( <—–does that say something ..maybe?) and also after Reagan signed the biggest expansion of Medicare in its history in 1988…..Yeah we even survived that one, and the employment participation rate went right back up as the economy improved even with all that redistribution going on !

        I don't know why you buy into the bullshit ? Why don't you just admit that you dislike the guy in office for no other reason than he's not on your team …..even though he's run your country like a moderate Republican.

        I am so sick of the spin and the ignoring of facts for the sake of a party. It is whats killing this country.

        Food stamp rates: http://www.trivisonno.com/wp-content/uploads/Food-Stamps-Yearly.jpg

        Reagan expanding Medicare : http://articles.latimes.com/1988-07-01/news/mn-6526_1_medicare-expansion

        • Jeff,

          If, against all evidence to the contrary, you want to vote for four more years of this stagnation, you can go right ahead. I’m tired of hearing people still blame Bush four long years after he’s been gone. Frankly, that’s BS.

          Moreover, food stamp participation is higher partly due to Obama administration policies that expanded eligibility for them. As a result, the number of people on food stamps has expanded by more people under the Obama administration than in twice the time under the Bush administration.

          You are ignoring reality. Do you honestly think the same policies of the last four years will make things better over the next four? We are at the exact same unemployment rate we were when Obama took office. The median income is $4,000 lower. A country we liberated from Qaddafi just killed our ambassador, and I am buying into BS?

          US GDP growth is at 1.7%, and the President’s answer is to increase taxes?

          If it helps to keep pointing backward at Reagan and Clinton, that’s fine if it makes you feel better. The problem is you are ignoring the data staring you in the face. By any objective measure, the data has gotten worse, not better, since Obama took office, despite four consecutive trillion dollar plus deficits.

          • Jeff Fordham says:


            I’m tired of hearing people still blame Bush four long years after he’s been gone. Frankly, that’s BS.”

            I was comparing the fact that food stamp use did indeed double under Bush and all while during a great economy ….post– those big tax cuts that “stimultaed” the economy. If you dig a little bit you will see that eligibility requirements were loosened for food stamps under Bush as well as under Obama. Factcheck.org has a nice analysis on the subject….The difference is to me is that I expected Obama to help people after the crash …..thats what a president is supposed to do.

            Why not also put some of the blame of an increase in food stamp use where it belongs …………or more precisely on the 235 Republicans in the House and Senate who overrode Bush’s veto of the SNAP legislation (to lessen requirements in 2008). So, lets get this straight…..Obama comes into office with a bill ALREADY on the books in 2008 to lessen food stamp requirements which was brought to life by a bipartisan override of Bush’s veto…………………with only 12 Republicans in congress voting to uphold the veto and 235 Republicans voting FOR the food stamp legislation. Food stamp use increases even more now thanks to this 2008 bill, and then Obama comes into office and offers a work requirments waiver for 18-49 year olds without dependents in the stimulus bill. ( which only 9.7% of applicants actually use). But in 2012 the total increase is erroneously hung around Obama’s neck because it makes for a good attack talking point……….never mind the actual truth about who is responsible.

            Factcheck.org for some…..facts : http://www.factcheck.org/2012/09/romneys-food-stamp-stretch/

            Yes, I am not that happy that the possibility for even more stagnation and the party of NO trying to block any attempt to move forward. I think there is clear evidence out there that tax hikes do not hurt the economy… but perhaps the contrary…..case in point: Reagan’s 5 tax hikes……Bush Sr. tax hikes and of course Bill Clinton’s tax hikes certainly did not hurt the economy heading out of the last Century. Now….. I will though make the case that “unfunded” tax cuts like Bush42 put in place do indeed hurt an economy. To offer them without a likewise cut in spending is nothing more than a future burden shift to tax payers down the road…….and that is exactly what has happened. We are suffering because of it.

            Let me put it this way………..I am more afraid of Romney doing more damage than Obama……..and that is why I will not be voting for the vulture capitalist. He wants to increase military spending ?? After Bush doubling military spending from 350 billion to well over 600 billion in 2009 where its been hovering ever since…….whats acceptable …….a trillion per year?…………….plus our post Iraq and Afghanistan obligations? This is pure insanity.

            I am also afraid of Romney succeeding in even more financial deregulation…… more than his manipulation of social security and medicare. I also take issue with an American president who has so much of his wealth hiding off shore. I think this is downright unpatriotic whether its legal or not. I do not feel comfortable with a wealthy globalist who would do all he can to tweek the system to favor more wealthy globalists like himself so they can move their money around the world one step ahead of the tax man.

            As far as trying to make hay about the attack in Libya…….its more bullshit. The Ambassador took a chance and traveled down to Benghazi where security was not strong as in the embassy in Tripoli. The attack was successful because they caught him in an unsecure situation…….end of story. I have no problem with Obama as far as being strong with our security interests………..his 285 successful drone attacks (to Bush’s 46) and his capture of Bin Laden are more than I need prove hes after the nuts and bolts of the situation …..rather than nation building at 12 BILLION per
            month.

            I feel that Rick Santorum was honest when he said Romney was the worst pick the GOP could have made for their candidate, and better yet, I think New Gingrich was correct when he stated that Romney was “fundamentally dishonest” ….but I will concede that Gingrich was the fat pot who was calling the kettle black.

            If Obama happens to win you have only the Republican party to blame……….this election should have been a slam dunk….. but perhaps enough people realize just who Romney is or isn’t?

      • henry says:

        If UI recipients state that they are no longer looking for work, their UI benefits would be stopped. UI recipients would not be counted as people who have given up looking for work. They would be rolled into the unemployed count.

  19. middleagedhousewife says:

    I’m wondering how the baby boomers who are eligible for retirement, but have postponed retirement, or have had to re-enter the workforce due to the bad economy factor into this?.

  20. Pingback: Obama vs. Romney: Jobs | My Job Advice - simple job employment advice - find a job today!

  21. Cal says:

    The crap about “President Bush’s last full month in office” is flagrant spin. January 2009 was a Bush month, no matter how you try to spin it.

    • Well that’s your opinion, and you’re certainly entitled to it. Moreover, there’s no spin involved since this blog post lays out multiple ways of calculating the stats, including ascribing January to Bush.

      Before accusing me of spin, I ask that you read the entire article so you have a more informed opinion.

  22. Ron OC says:

    Comparing the unemployment rates under Bush who took office when it was just over 4% with Obama who took office when it was just under 8% is like comparing a hitter hitting .200 with a hitter hitting .400. Normalize the numbers and get back to us so we can make a rational assessment of the relative job numbers under Bush vs Obama. For added validity you might factor in momentum factors beyond the simplistic 3rd grade level using a 19-day window.

  23. Perhaps in your opening graph you could extend backwards the number of Mr. Bush’s months as Mr. Obama has already attained. I know your other graphs do extend the time. I admire your patience in reading our words. Personally, I believe that a President, any President, is nearly powerless when it comes to creating jobs … it’s the economy which to a large extent is entirely un manageable.

    • Alex T says:

      orthovovoxwritying: Correct, any President is nearly powerless in creating job, however he is powerful in creating an environment favoring private employment growth. Bush had low employment as low as 4.7% in August 2006. How did that come about?

  24. Pingback: THE PUBLIC EYE: Obama vs. Romney: Jobs | Stock Market News - Business & Tech News

  25. Pingback: News: Reid and Democratic Lies on the Economy | Pitts Report

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