NYT: Just a reminder that the Obama recovery has lost more jobs than it created
posted at 2:20 pm on September 21, 2010 by Ed Morrissey
The New York Times throws a healthy dash of cold water on an attempt by Democrats and their allies to claim that Barack Obama has created more jobs in the US than George Bush, or even George Washington. Far from adding net jobs, Catherine Rampell correctly states that the US economy has lost jobs since the start of the recovery, now pegged at June 2009 by the NBER:
The United States economy has lost more jobs than it has added since the recovery began over a year ago.
Yes, you read that correctly.
The downturn officially ended, and the recovery officially began, in June 2009, according to an announcement Monday by the official arbiter of economic turning points. Since that point, total output — the amount of goods and services produced by the United States — has increased, as have many other measures of economic activity.
But nonfarm payrolls are still down 329,000 from their level at the recession’s official end 15 months ago, and the slow growth in recent months means that the unemployed still have a long slog ahead.
It’s actually worse than what this picture paints. Population growth in the US means that we add around 100,000 working-age adults, after deducting those retiring or otherwise leaving the workforce for reasons other than discouragement. The average loss of 22,000 jobs a month means that we went backwards 122,000 jobs per month in terms of workforce employment.
The flatline on job creation has dire implications for the White House if it continues much longer, and all indications are that it will:
Even without a full-blown double dip in the economy, the recovery thus far has been so anemic that the job picture seems likely to stagnate, and perhaps even get worse, in the near future.
Many forecasters estimate that output needs to grow over the long run by about 2.5 percent to keep the unemployment rate, now at 9.6 percent, constant. The economy grew at an annual rate of just 1.6 percent in the second quarter of this year, and private forecasts indicate growth will not be much better in the third quarter. (The Business Cycle Dating Committee itself does not engage in forecasting.)
The Reuters forecast for 2011 is for GDP growth of just 2.4%. Their usual optimism puts the US in a position where jobs continue to slightly erode for most of the next year in static terms, let along against population growth. This year’s forecast is for 2.7% growth, but that’s after a first quarter of 3.7% annualized rate of growth, which means Q3 and Q4 will fall considerably below the 2.7% mark.
If Reuters turns out to be too optimistic and the US “unexpectedly” tips back into a recession, Rampell points out that Obama won’t be able to claim that he inherited it. That may not matter much anyway, because the extended high rate of unemployment means that voters won’t have much buy-in to the current recovery and are likely to see it as a confirmation of the failure of Obamanomics. Even without a second recession, having an unemployment rate in the 9s or even 8s will make the 2012 election cycle into a repeat of 2010 for Democrats. And if they try to keep committing sophistry by trying to claim massive job creation while unemployment rises, it may be even worse than what Election Night in six weeks looks to be.