Dean Baker on the “Vibrant and Strong Economy”

Cecilia Kang plays Steno Sue with her Strong Jobs Report Eases Fears Over Economy’s Health. Steno Cecilia listens to President Bush and just repeats his spin:

President Bush said the jobs report pointed to a “vibrant and strong” economy, and he urged Congress to keep taxes low. In brief remarks from the Oval Office, he said he was mindful that some homeowners were worried about mortgage payments or the rising cost of college but added that with the revisions from August, “it means that we’ve had 49 consecutive months of job creation. And that’s the longest uninterrupted job growth on record for our country.”

Dean Baker puts all of this in context:

The article also allowed the Bush administration to do some unanswered boasting. Quoting the White House that the upward revision to the August data (from a loss to a gain) coupled with September’s jobs numbers “means that we’ve had 49 consecutive months of job creation. And that’s the longest uninterrupted job growth on record for our country.” While the statement is true, it is not terribly meaningful. Prior stretches of job creation were interrupted by short strikes. Since the White House is interested in records, the Post could have pointed out that the 0.64 percent annual rate of job growth since President Bush took office is also the slowest rate of job growth on record for any comparable period of time.

Dean must be referring to the payroll survey which shows a cumulative increase of only 4.36% over the past 6.75 years. The average growth rate has been anemic indeed. OK, Lawrence Kudlow and his crew will likely scream household survey forgetting about this footnote:

Data affected by changes in population controls in January 2000, January 2003, January 2004, January 2005, January 2006, and January 2007.

If one ignores this footnote, employment growth would appear to be 6.28% over this period. We might also notice that population has grown by 7.13%. You see – the employment to population ratio fell from 64.4% as of December 2000 to 62.9% as of September 2007. Simply put – employment has not grown as fast as the population regardless of how one measures it. One would think a reporter working for the Washington Post to at least get the data right.

Update: Tim Worstall offers this lame protest to what Dean said:

I think you may protest too much on this (no evidence, it’s just a feeling). From what I remember the unemployment rate at the start of the Clinton years was rather higher than it is now.

Crackers! That old chestnut? Yes Tim. Clinton did inherit a 7.4% unemployment rate but he left a 3.9% unemployment rate. Employment growth was strong enough during his eight years in office to dramatically lower the unemployment rate even as the labor force participation rate rose from 66.3% as of December 1992 to 67% as of December 2000. In other words, the employment to population rate rose from 61.4% to 64.4%. That’s some impressive job growth. Now if you wish to see what happened to the labor force participation rate and the employment to population ratio since December, check our my graph.

Update II: Paul Krugman weighs in:

Over the whole of the Clinton administration, the economy added 22.7 million jobs – 237,000 per month. Over the whole of the Bush administration to date, the economy added only 5.8 million jobs – 72,000 per month. The Bushies like to pretend that history began in August 2003, so that they can ignore the job losses early in the administration. But even that doesn’t do the trick. Since August 2003, the economy has added 8.5 million jobs – 172,000 per month. So even by cherry-picking the good Bush years and pretending the bad years never happened, they still can’t match the average rate of job creation under Clinton. Now, you might say that Clinton doesn’t deserve all the credit for good things that happened on his watch – and I agree. But it’s the Bushies who are trying to spin a mediocre job record into proof that their policies are wonderful. Did I mention that the Clinton job boom followed an, um, increase in taxes?

Also check out this coverage of Rudy the Idiot.