- The Washington Times - Friday, September 3, 2004

The Labor Department reported yesterday that nonfarm payrolls increased by 144,000 jobs last month, and it upwardly revised June and July employment figures by another 59,000 workers. Excluded from the 203,000 happy workers who were newly reported to have found jobs were John Kerry’s message-meisters, who, anticipating a bad jobs report, were poised to pounce on the White House the day after President Bush accepted his party’s nomination.

But the expected ammunition for the rhetorical assault proved to be blanks. That was especially so, given that the nation’s unemployment rate fell to a very respectable 5.4 percent, which is nearly a full percentage point below its cyclical peak of 6.3 percent reached in June 2003. With only one more jobs report due before Nov. 2, Mr. Bush will likely face the voters with an unemployment rate that is lower than it was on six of the past eight presidential election days. And if the past is any guide, Al Gore notwithstanding, Mr. Bush could receive some political dividends from the downward direction the unemployment rate has followed since early last summer.

The economy has now generated job growth in each of the past 12 months, during which nearly 1.7 million have been added. Since Mr. Bush entered office, however, the economy has incurred a net job loss of about 900,000 workers. But that bottom-line figure doesn’t really begin to explain what has happened. For example, in manufacturing, which accounts for 11 percent of the economy’s total nonfarm employment, there are about 2.7 million fewer workers today than there were in January 2001. That means that the economy’s non-manufacturing sector has added nearly 1.8 million jobs during Mr. Bush’s tenure.

Manufacturing’s job losses, however, are not attributable to declining manufacturing output, which was actually 2.4 percent higher in July 2004 than it was in January 2001. Rather, huge increases in manufacturing productivity (output per hour) explain why U.S. manufacturing output can increase while manufacturing employment has declined by nearly 16 percent during Mr. Bush’s tenure. Indeed, as the Labor Department reported Thursday, manufacturing productivity was about 19 percent higher last quarter than it was during the first quarter of 2001.

Nor can it be argued that manufacturing’s job losses began under Mr. Bush. In fact, there were 500,000 fewer manufacturing jobs in January 2001 than there were three years earlier.

To Mr. Bush’s benefit, not only is today’s unemployment rate comfortably below the average unemployment rates for the 1970s (6.2 percent), the 1980s (7.3 percent) and the 1990s (5.75 percent), but it is also below what many economists have considered for years to be the nation’s de facto full-employment level.

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