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).
It is also important to note that I made a slight change in methodology for these charts. In the past, the president who was in office at the end of each month received credit for the jobs created or lost in that month. As such, President Bush received credit for jobs lost in January 2001, and President Obama received full credit for jobs lost in January 2009. Now, I am giving each president credit for the net jobs lost or gained for the fraction of the month he was in office. For instance, President Bush will now get credit for 61% of the jobs lost in January 2009 (i.e., 19 days divided by 31 days), and President Obama will get credit for the remaining 39%. President Bush will also only get credit for 39% of the jobs lost in January 2001.
In August, the private sector added 17,000 jobs in the eighteenth consecutive month of private sector job growth. This development is moderately positive news. That said, the country had a net employment gain of zero total jobs (private and public). That’s right. Employers added zero net jobs in August. Furthermore, 0 falls well short of the 125,000 jobs needed every month just to keep pace with the growth of the working-age population.
The seasonally adjusted unemployment rate remained unchanged at 9.1%. This number remains 1.8 percentage points worse than President Bush’s last full month in office in December 2008. It also marks 31 consecutive months in which the unemployment rate has been 8% or higher in the 32nd 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. The good news is that the month ended with more people employed at the end of August than were employed at the end of July. The bad news is that the civilian labor force increased faster than the number of new net employees.
The civilian labor force ended July at 153.2 million vs. August’s 153.6 million. In contrast, 139.3 million people had jobs in July. The number of people with jobs increased by about 331,000 people from July to August, whereas about 366,000 people 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. The labor force participation rate increased 0.1% in August from 63.9% in 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 tenure, the private sector lost a net 346,000 jobs (the private sector gained a net 141,000 jobs under the old methodology). Surprisingly, this number includes the 3.78 million private sector jobs lost in 2008, and an additional 515,000 in 2009 under the new methodology.
In contrast, under President Obama’s administration, the private sector has still lost a net 2.14 million private sector jobs (2.65 million under the old methodology). If I blame Bush and Clinton for the January 2009 and January 2001 numbers, respectively, the private sector would still have lost 1.81 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 cut under George W. Bush, the private sector eliminated ~6 jobs under Barack Obama (under the old methodology, the private sector eliminated ~19 jobs for every job it created under Bush). While the private sector job outlook has improved recently, the economy still must create 2.14 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.