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 April, the private sector added a modest 130,000 jobs in the twenty-sixth consecutive month of private sector job growth. This development is somewhat positive news. The country had a net employment gain of 115,000 total jobs (private and public). Unfortunately, 115,000 is below the 125,000 jobs needed each month just to keep pace with the growth of the working-age population, which is discouraging news.
More importantly, April 2012 is the fourth 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 first month in which the number of net private sector jobs gained during the Obama administration turned positive. That said, the unemployment rate is still 0.8 percentage points worse today than it was during President Bush’s last full month in office, and it is 0.3 percentage points worse than when President Obama first entered office. In other words, the unemployment rate in all 40 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 dropped from 8.2% to 8.1% — the second lowest month of unemployment during the Obama presidency. This number remains 0.8 percentage points higher than President Bush’s last full month in office in December 2008. It also marks 39 consecutive months in which the unemployment rate has been 8% or higher in the 40th 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 fewer people employed at the end of April than were employed at the end of March, and the civilian labor force declined faster than the number of new employees entering the work force declined. Therefore, the main reason the unemployment rate declined is that the denominator (the civilian labor force) in the unemployment equation decreased more than that of the numerator (the number of employed Americans).
The civilian labor force ended April at 154.4 million vs. March’s 154.7 million. 141.9 million people had jobs in April, which was an decrease of about 169,000 people from March versus about 342,000 people who left 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 decreased by 0.2 percentage points from 63.8% in March to 63.6% in April as people exited the labor force.
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 gained a net 35,000 private sector jobs (a loss of 290,000 if one attributes the remaining 11 days of job losses in January 2009 to Obama, and a loss of 804,000 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~0.05 jobs under Barack Obama (if one attributes January 2009’s job losses to Obama, the private sector eliminated ~5 jobs for every job it created under Bush). The economy would need to destroy 35,000 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 finally surpassed President Bush 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.
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Great analysis. I always enjoy reading these and other articles on your blog. Bee
I think your endevour is a partisan fools errand! It’s an effort to assign some kind of blame. The economic problems that exist are certainly not the fault of Obama and to assert that he should have fixed a problem that was forty years in the making – in a mere four years – reveals a juvenile understanding of economics! No matter what you say….we are still much better off than when Bush left office! That is not to insinuate that I blame Bush for the massive economic collapse that happened on his watch! That too, would reveal a real juvenile understanding of the situation! Hey , if he loses the next election we’ll get to see what 8 more years of tax cuts can do! Oh, yeah……we already got to see what that will do!
“he economic problems that exist are certainly not the fault of Obama and to assert that he should have fixed a problem that was forty years in the making – in a mere four years – reveals a juvenile understanding of economics!”
Apparently your understanding of economics dictates that a president has absolutely no impact on the nation’s economic activity. Moreover, no one is expecting a complete turnaround, only that the economy be marginally better than it was when he took over. And it’s not. More people are unemployed today, or have completely given up than when he took over as president. To claim he is blameless is absurd and partisan in the extreme.
For example, unemployment was at 7.8% when he took over, and is now at 8.1% 3.5 years later, primarily as a result of people leaving the work force. Yet, Obama is not to blame whatsoever. He is blameless. He is a poor victim of history, and people should not bother placing any responsibility on him for his job performance. Let’s blame someone else. How dare anyone point at the President’s record.
Obama has nt been in office 3 1/2 years. It will be 3.5 years on July 20th. The data on unemployment for July won’t be available until August.
3.5 was indeed an approximation.
“While it is true that Obama inherited a tough economy, he hasn’t done much to improve it.”
Really? This is what qualifies for rational? Tough? That’s an understatement if there ever was one!
I look at my 401 and I see the comeback from 2008. I look back when I had lost nearly half of all my investments and now……..now I have almost gotten it all back! You are so far from rational it’s not funny!
You’re confusing the reversal of an irrational financial panic on asset prices with a general improvement in economic conditions. Prices rose after 2008 because they were irrationally cheap. Many companies were worth less than the cash they had on their balance sheets. In the beginning of 2009, I was buying stocks like crazy, because I could see it at the time. Moreover, you forget that it was TARP that single-handedly stabilized the financial system.
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“Apparently your understanding of economics dictates that a president has absolutely no impact on the nation’s economic activity. Moreover, no one is expecting a complete turnaround, only that the economy be marginally better than it was when he took over. And it’s not.”
If ya think the economy is not better you just reveal what a partisan ,myopic fool you are! And yes, any serious economist will tell you that the President has very little control over the economy, particularly now that we are a Global economy! Obama has no control over the problems in Europe which have direct consequences for us! The president can not create the demand that results in increased hiring. Actually the best thing he can do is try to inspire consumer confidence. Unless consumers spend the economy will not improve. Unfortunately they will not spend if they don’t have a job or are scared. It’s a vicious cycle. Consumer spending is number one – and car sales reveal that consumer confidence is getting better! You are entitled to your own opinions but not your own facts! Every indicator except job growth shows clearly that things are better! My business and my friend’s businesses are definitely doing better! I actually just hired a part time guy! I just initiated some radio advertising that has been great for us too! I have real life experience. What do you have……… Partisan Bullshit ?
“The president can not create the demand that results in increased hiring. Actually the best thing he can do is try to inspire consumer confidence. Unless consumers spend the economy will not improve.”
That’s interesting coming from someone who supports a party that has consistently argued that tax cuts failed (tax cuts give more back to the consumer who is responsible for ~70% of GDP), and that the stimulus should have been bigger (i.e., they believe that the President can indeed create demand through government stimulus).
“and car sales reveal that consumer confidence is getting better!”
This is definitely a misleading statistic. Car sales are up because people have avoided buying cars for so long, that at some point they absolutely have to buy. In fact, the average number of years that people wait to replace their cars has increased. Moreover, there’s a shortage of used cars on the market now: “Usually, there’s a good fleet of 2- to 3-year-old cars. Now, because people didn’t buy new cars, they’re harder to find.” As people delayed their auto purchases during the last five years, they absolutely have to buy cars when their current cars fail. That is what you are seeing. It isn’t a sudden bout of confidence.
“Unfortunately they will not spend if they don’t have a job or are scared. It’s a vicious cycle.”
I have a job and I’m not spending because I work 30% more for 30% less.
“Every indicator except job growth shows clearly that things are better! My business and my friend’s businesses are definitely doing better! I actually just hired a part time guy! I just initiated some radio advertising that has been great for us too! I have real life experience. What do you have……… Partisan Bullshit ?”
You claim that “every indicator except job growth” is up, then use an anecdotal example of how your business is doing. Yes, businesses selling certain items (e.g., liquor and porn) tend to do well in bad times, but everything else is a mess. Why, I ask, did you only hire the employee for part time? I’m guessing the higher anticipated cost of healthcare may have stayed your hand. What about the number of Americans receiving assistance from the federal government? It’s definitely way up. More Americans are on food stamps than at any time in our history. The median American income has declined. The suicide rate is up. Gas prices are near record highs. Nationwide housing prices have barely stabilized, and are still declining in many local markets. The cost of healthcare continues to rise despite the promises made by Obamacare’s proponents. Food prices are even up.
I call “partisan bulls**” on you. Check the facts, and remove your Obama colored goggles.
I realize I’m late to the party, but I thought this chart was quite interesting in light of the naggingly high unemployment rate under Obama’s watch and the constant conservative refrain that he and fellow Democrats favor “bloated government”. Judge for yourself:
Reagan started from a lower base than Obama did, so his growth rates would seem much higher. F2009 started at unprecedented levels (i.e., $1 trillion + deficits), and has remained there consistently throughout the Obama administration. On an absolute level, the Obama administration has spent more government dollars than any regime in the history of human civilization.
Every President starts with a lower base of spending than his successor, so that’s meaningless. Inflation alone causes the proportionate level of spending to be absolutely higher. The point is, Reagan (hero of “small government”) increased government spending quarter-to-quarter more than the next 4 Presidents. Bush II was next. Obama, the “big spender”, has had the least growth in spending, despite the stimulus and bailouts.
When we’re comparing Obama to FDR, we might pause to consider the participation of Congress in presidential job-creation efforts. While FDR did have to deal with a small cabal of plutocrats who were actively plotting to overthrow him (according to Smedley Butler), he did not have to deal with a whole opposition party publicly pledged to make his administration a failure, or a party which voted in lockstep to oppose virtually any measure he put forward even if they’d initially come up with the idea themselves. If you tie someone’s shoes together at the beginning of the race, it’s not intellectually honest to mock him for not running fast.