With the recent release of the employment numbers for June, we now have labor-market data spanning more than 80 percent (6.5 years) of the eight-year Bush-Cheney administration. So, on the jobs front, how does the current administration stack up against the two-term presidencies of Ronald Reagan and Bill Clinton? Let's look at nonfarm payrolls in the private sector.
Rising from fewer than 75 million jobs in December 1980 to nearly 90 million eight years later, private nonfarm payrolls expanded by 19.5 percent during the Reagan administration, averaging an annual compounded rate of increase of 2.25 percent. Inheriting an inflation rate of 12.5 percent and a prime rate that peaked at 21.5 percent the month before he entered office, Mr. Reagan soon faced the deepest postwar recession, which hit bottom near the end of 1982. During the final six years of his presidency — the legendary Reagan expansion — private payrolls grew by 16.4 million jobs. That increase averaged nearly 2.75 million jobs per year and more than 225,000 per month as the creation of private-sector jobs accelerated to an average annual rate of 3.44 percent (1983-1988).
Bill Clinton entered office nearly two years after the 1990-1991 recession ended. With the economy growing an average of 3.6 percent per year throughout the Clinton presidency (the economy has grown less than 2.5 percent per year since Mr. Bush entered office), private-sector payrolls increased by 23.3 percent, or more than 21 million jobs, during the Clinton era. Private payrolls expanded at an average annual rate of 2.66 percent. The unemployment rate declined eight years in a row, reaching 4 percent for 2000, the lowest rate in more than 30 years. All the more astonishing was the fact that during each of the four years in Mr. Clinton's second term, the civilian labor force participation rate (the percentage of America's noninstitutional population 16 years and older that was either employed or looking for work) was a record-level 67.1 percent.
During the first six and a half years of the Bush-Cheney administration, which confronted a recession two months after entering office, private payrolls have increased by 4.1 million jobs. Compared to private-sector job-expansion rates during the Reagan presidency (2.25 percent per year and 152,000 jobs per month) and the Clinton presidency (2.66 percent per year and 220,000 jobs per month), private payrolls have grown by 0.55 percent per year and 52,000 jobs per month during the Bush-Cheney administration through June.
Since the 2001 recession ended, private job growth has still averaged less than 1 percent a year (92,000 jobs per month). Even since August 2003, when private payrolls hit bottom, the total increase in private jobs (7.5 million) has averaged only 1.77 percent per year and 163,000 jobs per month. Comparing the entire Clinton presidency to just the last 46 months of the Bush administration (i.e., since August 2003), one finds that the average annual rate of private-sector job creation for the entire Clinton era (2.66 percent) is more than 50 percent higher than the average annual rate of job creation (1.77 percent) during the best 46 months (September 2003 through June 2007) of the Bush era.
In recent years, the Bush administration understandably has been highlighting the unemployment rate, which has averaged an impressive 4.9 percent over the past three years and 4.5 percent over the past 12 months. These are similar to the unemployment rates that prevailed during the last four years of the Clinton administration. But they are not necessarily comparable. Specifically, the present unemployment rate of 4.5 percent is derived from a labor force participation rate of 66.1 percent: In fact, if the rate today were at the level that prevailed during the month Mr. Bush entered office (67.2 percent), then today's unemployment rate would be 6.2 percent. That's nearly 40 percent higher than June's rate of 4.5 percent. Moreover, if the labor force participation rate were 67.2 percent (the January 2001 level), instead of reporting that 6.933 million available workers were unemployed in June, the Labor Department would have reported that 9.644 million were looking for work.