- The Washington Times - Saturday, August 5, 2006

For the fourth month in a row, the government released disappointing job numbers on Friday. Only 113,000 nonfarm payroll jobs were created in July, unchanged from the 112,000 average for the previous three months.

Nevertheless, the White House issued its customary “Fact Sheet” hailing the latest employment report. As the end of the fifth year of the economic expansion approaches, the White House reported that “[t]he economy has created more than 1.7 million jobs over the past 12 months — and more than 5.5 million jobs since August 2003.”

While true, neither figure represents a particularly major accomplishment. Over the past 12 months, for example, the 1.737 million increase in employment represents a rise of 1.3 percent; and the 5.557 million jobs created since August 2003 reflect an annualized growth rate of 1.4 percent. By comparison, throughout the entire eight years of the Reagan administration, which included the deepest recession since the Great Depression, annual nonfarm employment grew at an average rate of more than 2 percent. During the eight-year Clinton administration, the comparable jobs growth rate averaged 2.4 percent per year. Over the first five and a half years of the current administration, annualized job growth has averaged 0.4 percent. So, creating “more than 5.5 million jobs since August 2003” should be understood in context.

The “Fact Sheet” also reported that “wages grew 0.4 percent in July,” which it said was “faster than inflation.” That’s interesting, because the inflation rate for July, as measured by the percentage change in the consumer price index for last month, has not been reported yet. True, July’s average wage increase exceeded the increase in the CPI for June.

So, why quibble? Because the administration has been caught recently playing fast and loose with nominal changes in wages. In May, for example, a White House press release asserted that “average hourly earnings have risen 3.8 percent over the past 12 months” without bothering to acknowledge that the latest 12-month inflation rate had been 3.4 percent. In fact, inflation-adjusted average hourly earnings for June (the latest data available) were less than they were a year ago and 1.6 percent below their level three years ago.

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