- The Washington Times - Wednesday, May 12, 2004

Reflecting the fastest growth rate in two decades, the economy has been expanding at a 5.5 percent annual rate over the last three quarters. Meanwhile, the labor market has finally caught fire over the past two months, as nonfarm payrolls surged by 337,000 jobs in March and 288,000 jobs in April.

Amid such good news, John Kerry greeted March’s surge in employment by straight-facedly tracing it to the end of a grocery workers’ strike in California and good weather that prompted the hiring of many part-time construction workers. When April’s jobs performance virtually replicated March’s, Mr. Kerry declared, “America is still in the worst job recovery since the Great Depression.” With the unemployment rate falling to 5.6 percent last month from its cyclical peak of 6.3 percent in June, this is what passes for serious analysis from the Democratic Party’s standard-bearer: rhetorically associating recent developments with the Great Depression. By way of historical perspective, the nation’s unemployment rate increased from 3 percent in 1929 to 25 percent in 1933. In 1939, 10 years after the onset of the Great Depression, the unemployment rate still exceeded 17 percent. By contrast, today’s unemployment rate of 5.6 percent is less than the average rates that prevailed during the 1970s, 1980s and 1990s.

For today’s economy to generate long-run, sustainable employment growth, it will have to do so in the service-providing industries. After all, in July 2000, the month that manufacturing employment reached its last peak of 17.3 million jobs, employment in service-providing industries was 107.3 million, or 90 million jobs higher. To this end, private service-providing industries generated 238,000 jobs in April, exceeding the 228,000 private service jobs created in March.

Given that the economy is widely expected to continue expanding at a robust pace for the balance of the year, there is good reason to believe that employers will continue adding to their payrolls. Nonfarm businesses apparently have concluded that additional employees will now have to be hired to meet rising demand for their products, and the need to restock undesirably low inventories will provide further impetus to strong growth. In this atmosphere, Mr. Kerry’s silly talk associating today’s recovery with the experience during the Great Depression will be seen to be even more absurd than it already has been.

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