This post is on the number of jobs in the US economy over time. Just about every candidate for President promises he/she will create jobs, and just about every President that can boasts about job creation. So let’s see how they do. Data on job creation comes from BLS table Table LNS12000000, Seasonal Employment Level.
OK. So what does the (annual average) seasonally adjusted civilian labor force look like?
Here’s a summary…
Fastest growth… Carter. Second fastest… Nixon/Ford. Then Reagan leading Clinton and JFK/LBJ by a smidge. Recall that the four administrations under whom growth rate of real GDP per capita was the fastest were in order JFK/LBJ, Clinton, Reagan, and Carter. A fast growing economy creates jobs, and jobs create a fast growing economy. More on this in a moment, but first a couple comments… First, a means test under the null hypothesis that the creation of jobs under Reps is the same as the creation of jobs under Dems is rejected at the 10% level (P value of 0.095). If the assumptions of the means test are acceptable under the circumstances, it would seem that job creation is more favorable under Dem administrations than under Rep administrations. Second, GW likes to talk about job creation since mid-2003. Well, the annualized rate of job creation between 2003 and 2006 is… 1.59%. Five administrations did better (during their entire term) than GW did under the cherry-picked term.
Back to: a fast growing economy creates jobs, and jobs create a fast growing economy. Or is that what we should conclude? Do more people getting jobs lead to growth? Does faster growth lead to more employment? Both? Neither?
The table indicates that the strongest correlation between the growth rate of the two series occurs in the same year. But… a quickly growing economy is also correlated positively (0.35) though not strongly with an increase in employment next year. The table seems to indicate that a fast growing economy is more likely to generate new jobs than new jobs are to generate a fast growing economy.
I think from here the place to go is the employment population ratio. And I think that particularly statistic should be split into male versus female… the ratio of women who want jobs has changed over time as cultural norms have changed. I’ll try to write up a post on that some time soon.