Election Economics: More of the Jobs Story
Here are some jobs facts that might be helpful when you listen to the candidates.
During 1933, the unemployment rate was a cataclysmic 24.9%. Having entered office that year, FDR was re-elected in 1936 with unemployment still soaring but better at 16.9%. The next president to be reelected with pretty dismal unemployment numbers was Ronald Reagan. The year was 1984 and the average unemployment rate was 7.2%, down from 7.5% 4 years earlier.
Both FDR and Reagan faced major economic challenges when they entered office. For FDR, the Great Depression was unprecedented. With Reagan, stagflation–inflation and unemployment- was tough to solve because the solution to one problem made the other worse. For both, things were getting better when they sought a second term.
That takes us to a question we will be asking in “election economics.” How much has the economy improved since President Obama entered office?
Using the following table, we can look at several yardsticks and arrive at different conclusions.
|January 2009||October 2009||July 2012|
|Household survey employed||142.1 million||138.3 million||142.2 million|
|Nonfarm payrolls employed||134.4 million||131.0 million||133.2 million|
|Change from previous month: Household survey||-1.2 million||-589,000||-195,000*|
|Change from previous month: Nonfarm payrolls survey||-655,000||-190,000||+141,000*|
*Not considered statistically significant
Source: Bureau of Labor Statistics
- The unemployment rate increased from 7.6% when Mr.Obama entered office to a peak of 10.2% several months later and then decreased to its current rate, 8.3%. (Do you remember when unemployment was 4.4% during March 2007?)
Number of Jobs:
- The number of jobs that have been added to the economy is a debatable figure. If you compare January 2009 and now, job numbers have remained almost the same. Instead, starting when unemployment was at its worst, using figures from the households survey (more about the survey here) on which the unemployment rate is based, there are 4 million more jobs now. On the other hand, the nonfarm payrolls survey indicates that the increase in those who are employed has been 2 million jobs.
- Finally, we could just say all that matters is the number of jobs that are added monthly. Then, we just look at the nonfarm payrolls totals and see that there were 141,000 jobs added.* (Please do go to this econlife post to see that actually, a seasonal adjustment calculation created that result.) However, the nonfarms payroll numbers exclude the self-employed, household workers and other types of workers.
So where does it leave us on whether the jobs picture is looking better? Perhaps we just have to see how people feel.
Released by the Conference Board several days ago, consumer confidence dipped because, “Consumers were more apprehensive about business and employment prospects…Those expecting more jobs in the months ahead decreased to 15.4 percent from 17.6 percent, while those anticipating fewer jobs rose to 23.4 percent.” All though was not negative. You can see a summary of the entire report here.
With graphs that were especially fascinating, the Bureau of Labor Statistics has a wonderfully thorough report on labor and the Great Recession and they have an interesting discussion about labor and the Great Depression here. For my statistics, I also used their monthly reports on unemployment.
*Originally, this post noted 163,000 as jobs created for July. However, the August jobs report revised it downward to 141,000.
Election Economics Topics:
- Aging Challenges: 8/27
- A Healthcare Overview: 8/20
- Paul Ryan and economist Friedrich von Hayek: 8/13
- Unemployment: 8/6
- Minimum Wage: 7/30
- Dodd-Frank: 7/23
- Outsourcing: 7/16