Update: Click here for the most recent jobs statistics.
As is customary on this site, 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 July, the private sector added 154,000 jobs in the seventeenth consecutive month of private sector job growth. Again, this is moderately positive news. At least the country had a net employment gain of 117,000 total jobs (private and public). That said, 117,000 falls short of the 125,000 jobs needed every month just to keep pace with the growth of the working-age population.
More good news is that the seasonally adjusted unemployment rate actually ticked down in July from a whopping 9.2% to a slightly less bad 9.1%. This number is 1.8 percentage points worse than President Bush’s last full month in office in December 2008. It also marks 30 consecutive months in which the unemployment rate has been 8% or higher in the 31st month of the Obama Presidency.
Furthermore, 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 employment. In fact, the month actually ended with fewer people employed at the end of July than were employed at the end of June.
How is this possible?
Well, it turns out that the civilian labor force (the denominator of the unemployment rate) declined faster than the number of people who had jobs (the numerator). The civilian labor force ended June at 153.4 million vs. July’s 153.2 million. In contrast, 139.3 million people had jobs in June. The number of people with jobs declined by about 38,000 people from June to July, whereas about 193,000 people retired or simply stopped looking for work over the same period.
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 dropped 0.2% in July from 64.1% the previous month.
Therefore, the unemployment situation is even worse than it appears, because it does not account for people who have been forced to exit the labor market, because they can not find jobs.
Putting the Numbers into Perspective
President Bush’s overall record continues to look far better than President Obama’s to date. Over President Bush’s presidency, the private sector created a net 141,000 jobs. Surprisingly, this number includes the 3.78 million private sector jobs lost in 2008.
In contrast, under President Obama’s administration, the private sector has still lost a net 2.67 million private sector jobs. If I blame Bush and Clinton for the January 2009 and January 2001 numbers, respectively, the private sector would still have lost 1.83 million private sector jobs under the Obama administration.
Again, the point of this argument is not to assess blame on either administrations’ policy. It simply puts the numbers into perspective.
For every job that the private sector created under George W. Bush, the private sector eliminated ~19 jobs under Barack Obama. While the private sector job outlook has improved recently, the economy still must create 2.67 million private sector jobs to break even.
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.