- The Washington Times - Sunday, June 6, 2004

The U.S. jobs market continued to sizzle last month, matching a red-hot economy that has grown by 5 percent during the past year, the fastest four-quarter growth rate in two decades. Nonfarm employment in May jumped by a very impressive 248,000 jobs, once again exceeding consensus projections by bullish, optimistic economists. Maintaining another recent pattern, an upward revision of March employment raised its gain to 353,000 — a 45,000 improvement over the initial estimate. April’s nonfarm employment increase was upwardly revised as well, rising to 346,000 from the 288,000 originally reported.

The expansion of jobs in May was as widespread as it was deep. Rising for the fourth consecutive month, long-beleaguered manufacturing employment increased by 32,000 jobs. Construction employment increased by 37,000. Service industries in the private sector generated 203,000 jobs. The only major sector to lose jobs was government, which shed 27,000 jobs, a development that should be welcomed during these fiscally challenging times.

Altogether, it was the ninth consecutive month of job growth, which began in September. Over that period, more than 1.4 million jobs have been created. More importantly, nearly 950,000 net new jobs have been generated during the past three months alone. Since the beginning of the year, monthly employment gains have averaged nearly 250,000. With employment now more than 350,000 above the level in November 2001, when the recession officially ended, the U.S. economy clearly has emerged from its widely disparaged “jobless recovery.”

The nine-month expansion of more than 1.4 million jobs represents the restoration of more than half of the 2.6 million jobs that were lost from the time President Bush entered office to August 2003. By historical standards, that may not seem impressive; but under the extraordinary circumstances that the Bush administration inherited or soon experienced, the vigor of the delayed jobs recovery in fact represents an important accomplishment.

Consider these factors: (1) While a recession officially began less than two months after Mr. Bush was inaugurated — itself a jarring welcome — there is ample evidence suggesting that the recession probably began in 2000, when, for example, U.S. total output actually declined during the third quarter. (2) A stock-market collapse, which had begun in March 2000, was ongoing during and after the change in administrations. (3) A corporate-governance scandal, whose seeds were indisputably planted during the second Clinton-Gore administration, was about to explode on Mr. Bush’s watch. (4) The September 11 terrorist attacks decimated consumer and business confidence, neither of which was helped by the unavoidable geopolitical uncertainties that followed September 11.

Given the robust momentum of the U.S. economy, most economists now reasonably expect the re-invigorated labor market to sustain its strength. If the jobs expansion proceeds at the same pace that has occurred since the beginning of the year (an average of 238,000 per month), the Bush administration will restore all of the jobs that were lost due to the extraordinary circumstances it either inherited or experienced shortly after gaining office. In fact, there would be a net gain of about 750,000 jobs by the end of its term. With the misery index (the rate of inflation plus the rate of unemployment) below 8 percent, a favorable level for any administration seeking re-election, the political dividends could be substantial.

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