- The Washington Times - Friday, February 15, 2008

ANALYSIS/OPINION:

The latest monthly employment report released Feb. 1 by the Labor Department included disappointing news for January and downward revisions of previously reported nonfarm-employment numbers. In fact, the recent dramatic slowdown in job growth helped to explain why primary voters so far this year have been telling pollsters that they consider the economy to be in relatively bad shape. Indeed, an average of 65 percent of Republican-primary voters in California, Missouri and New Jersey described the national economic condition as “not so good” or “poor.” Within the significantly larger turnouts of Democratic-primary voters in the same three states, more than 90 percent considered the U.S. economic condition to be “not so good” or “poor.” This news on the employment front and the economic pessimism expressed by voters in both parties strongly suggested that current trends in the labor market could have ominous implications for Republican candidates.

After 52 consecutive months of increases in nonfarm employment — a record-setting pace that the White House had been trumpeting every month and that President Bush highlighted in his Jan. 28 State of the Union address — the Labor Department reported on Feb. 1 that payrolls declined in January by 17,000 jobs. Moreover, as a result of routine changes in earlier data, the seasonally adjusted nonfarm-employment level previously published for December was revised downward by 376,000 jobs.

We now have employment data for the first seven years of the Bush administration. With the presidential and congressional elections less than nine months away, it will be politically and economically instructive to review the employment trends during this presidency with those that occurred in the past.

During the first seven years of the Bush administration, nonfarm employment has grown by 5.634 million, averaging a net increase of 805,000 jobs per year and 67,000 jobs per month. This reflects an average, compounded annual employment-growth rate of 0.6 percent, which is quite weak compared to previous presidencies.

True, the Bush-Cheney administration inherited a recession, which began less than two months after its inauguration. But it is also true that the 2001 recession was both relatively brief (eight months) and relatively mild (the economy still showed positive growth in 2001 despite an eight-month recession).

Compared with the average net increase of 67,000 jobs per month during the first seven years of the Bush presidency, monthly employment grew by an average of 240,000 jobs throughout the eight years of the Clinton presidency, during which more than 23 million nonfarm jobs were created. Thus, monthly employment increased more than 3.5 times as fast during the 1993-2000 period as it did during the 2001-07 period. The average, compounded annual employment-growth rate during the Clinton years was 2.4 percent, or four times the pace of annual employment growth over the past seven years. Whereas total nonfarm employment increased by 21 percent during the eight years of the Clinton administration, it has increased by only 4.3 percent during the first seven years of the Bush administration.

The economic situation inherited by President Reagan was much worse (a 12.5 percent inflation rate and a prime interest rate above 20 percent) than the one bequeathed to the Bush-Cheney team. As a result, the recession that began in 1981 was much deeper (unemployment peaked at 10.8 percent) and lasted much longer (16 months). Nevertheless, during the eight-year Reagan administration, nonfarm employment increased by nearly 16 million jobs, growing at an average, compounded annual rate of 2 percent over eight years, including the deep, lengthy recession. In the last six years of the Reagan presidency, after the recession he had effectively inherited had ended, more than 18 million jobs were created, averaging more than 250,000 per month.

While the Carter administration encountered (caused?) many economic problems, employment growth was not one of them. Nonfarm payrolls grew by nearly 10.5 million jobs during his four-year term; that is nearly 90 percent greater than the 5.6 million jobs created during the first seven years of the Bush-Cheney era.

Even the 52-month “Bush boom” in job growth pales by comparison. Employment growth averaged 159,600 during this period. As noted above, the Clinton-era monthly average exceeded 240,000 jobs; that was more than 50 percent higher than the average during Mr. Bush’s 52-month streak. Even less well-known is the fact that 26.7 percent (nearly 18,000 jobs per month) of Mr. Bush’s relatively minuscule monthly average of 67,000 jobs (2001-2007) were created in the government sector. By contrast, only 8.3 percent of the job growth during the Clinton years occurred in government.

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