Bush vs. Obama: Unemployment (August 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 August, the private sector added only 103,000 jobs in the thirtieth consecutive month of private sector job growth. This development is somewhat negative news. The country had a net employment gain of only 96,000 total jobs (private and public). Moreover, 96,000 is below the 125,000 jobs needed each month just to keep pace with the growth of the working-age population, which is discouraging.

August is the eighth 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 fourth 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 eight-tenths of a percentage point worse today than it was during President Bush’s last full month in office, and it is three-tenths of a percentage point worse than when President Obama first entered office. In other words, the unemployment rate in all 44 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 two-tenths of a percentage point to 8.1% — the second lowest month of unemployment during the Obama presidency. This number remains eight-tenths of a percentage point higher than President Bush’s last full month in office in December 2008. It also marks 43 consecutive months in which the unemployment rate has been 8% or higher in the 44th 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 119,000 fewer people employed at the end of August than were employed at the end of July (one can attribute the discrepancy to the fact that households report this number, while businesses report nonfarm employment), and the civilian labor force decreased faster than the number of new employees entering the work force decreased. Therefore, the main reason the unemployment rate improved is that the denominator (the civilian labor force) in the unemployment equation decreased by a larger percentage than the numerator did (the number of unemployed Americans). Put simply, the unemployment rate improved because the civilian labor force shrank – a decidedly worrisome development.

The civilian labor force ended August at 154.6 million vs. July’s 155.0 million. 142.1 million people had jobs in August, which was a decrease of about 119,000 people from July versus about 368,000 people who exited 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 declined by two-tenths of a percentage point from 63.7% in July to 63.5% in August.

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 415,000 private sector jobs (a gain of 90,000 if one attributes the remaining 11 days of job losses in January 2009 to Obama, and a loss of 424,000 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~0.6 jobs under Barack Obama (if one attributes January 2009’s job losses to Obama, the private sector eliminated ~3 jobs for every job it created under Bush). The economy would need to destroy 1.061 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.

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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.

24 Responses to Bush vs. Obama: Unemployment (August 2012 Jobs Data)

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

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

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  7. Pingback: Bush vs. Obama: Unemployment (December 2011 Jobs Data) | Reflections of a Rational Republican

  8. Pingback: Bush vs. Obama: Total Private Sector Employment | Reflections of a Rational Republican

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  17. Henry says:

    Have you thought of having an analysis of both the NSA and SA payrolls? The NSA numbers to account for inflated job numbers for the birth/death model and seasonal factors? The NSA numbers show job losses during the last 2 months.

  18. octavian61 says:

    I just say, four more years of Obama, and we can really compare numbers then.

  19. octavian61 says:

    I just say, four more years of Obama, and we can fairly judge against Bush. That’s if we are allowed to comment on him then.

  20. Adam Kontras says:

    Great numbers and analysis, but why on earth are you trying to compare the two? They didn’t start at the same place. It’s like saying someone won a race when their only competitor started 3 miles behind them. The reason people highlight the end of the Bush administration when it comes to the economy is to show that it was in absolute FREE fall. Look at the unemployment rate chart at the end of the Bush term. It was STRAIGHT UP. LOL. You actually think Obama had anything to do with that trajectory? And Obama is no FDR because FDR came into a nation who had 3 years of economic woe to actually FEEL how bad it was. Obama didn’t. People didn’t start “feeling” this economy until the summer of 2009. So at least compare apples to apples…

  21. W3bj3d1 says:

    If Obama couldn’t fix Bush’s mess, he sure can’t fix Obama’s.

  22. Pingback: Anonymous

  23. gonkhilly says:

    Could the reason for a steady drop in workforce partcipation over Bush’s and Obama’s presidencies be due to Baby Boomers retiring? Just curious as to what could cause such a trend over 12 years.

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