- The Washington Times - Friday, November 5, 2004

Three days after President Bush won re-election, he received more good news on the economic front. The Labor Department reported yesterday that nonfarm payrolls expanded by 337,000 jobs in October. On top of that, August and September payroll numbers were upwardly revised by 70,000 and 43,000, respectively. Together, October job growth and the revisions produced a net gain of 450,000 jobs, the report revealed.

October’s gain of 337,000 jobs was the second-largest monthly increase during Mr. Bush’s first term. Over the past 12 months, nonfarm payrolls have grown by more than 2 million jobs, while the monthly average for August, September and October has climbed to 225,000 jobs. The economy has now recovered 82 percent of the 2.7 million jobs that were lost between the beginning of the 2001 recession in March of that year and the resumption of job growth in August 2003. Nearly 1.2 million of those 2.7 million jobs, it’s worth noting, were lost during the last four months of 2001, largely in response to the terrorist attacks of September 11.

As a result of the surge in job growth over the past year, there are only about 375,000 fewer nonfarm payroll jobs than there were when Mr. Bush was inaugurated. And the future of the labor market looks quite good. The economy is now expanding at an impressive, sustainable pace. The annual growth rate for the third quarter was 3.7 percent, while economic output has increased by nearly 4 percent during the past four quarters. Thus, with this momentum, there is good reason to expect that Mr. Bush’s first term will in fact have experienced net job growth by the time he is inaugurated for a second term in January. To meet that goal, monthly job growth must average a mere 125,000 jobs for November, December and January.

The Labor Department reported Thursday that the annual rate of productivity growth in the nonfarm business sector decelerated to 1.9 percent during the third quarter — significantly below the rate of more than 5 percent that prevailed throughout the previous six quarters. If the 1.9 percent rate portends a new trend, then businesses may respond by further increasing their demand for workers to meet the continuing growth in demand for their output. If productivity increases become the norm, then steady, impressive, sustainable monthly job increases may follow.

These welcome developments in the labor market, coupled with equally impressive and sustainable output increases, would enable the Bush administration to concentrate on addressing the economy’s long-term entitlement problems, the current structural imbalances involving the growing budget and trade deficits, and the falling personal savings rate.

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