Obama's record on job creation: How good or bad?
The question of jobs is central to Election 2012. Mitt Romney claims President Obama has been a failure, while Obama says he's presided over steady growth. Decoder sweeps aside the spin.
When the latest monthly numbers on job creation came out on Sept. 7, the candidates for president went into spin mode full tilt. President Obama touted that "business once again added jobs for the 30th month in a row," while Republican Mitt Romney said the 95,000 people who found jobs in August were outnumbered by nearly 400,000 people who dropped out of the labor force, apparently in discouragement.Skip to next paragraph
With only about six weeks before the election, their sparring over the state of the economy points to a question that both campaigns know is on the minds of undecided voters: Does Mr. Obama have a solid track record on jobs, or have key policy efforts of the past four years failed?
The evidence, viewed through the lens of history and expert analysis, arguably points to a presidency that helped to jump-start a rebound from deep recession – but that perhaps could have achieved more to bring down unemployment.
At the outset, though, it's important to note that the economy is in many ways outside the direct control of any president. Government policies are just one of many forces that influence the economy for better or worse. At the same time, many economists say federal policies – by Obama, President Bush, Congress, and the Federal Reserve – have played an unusually important role in the economy over the past five years or so, since the financial crisis began.
Some of the important facts:
- Obama is correct when he says that in the past 30 months, private-sector employers have created about 4.6 million net jobs, according to tallies by the Bureau of Labor Statistics. Since the public sector has been cutting jobs during that time, the nation as a whole has added about 4 million jobs, which works out to about 135,000 per month. The most recent months have been a bit below that average.
- Since January 2009, when Obama took office, the job tally is essentially flat – down by 261,000 actually. This number indicates the sharp contrast between the most recent 30 months and economy's performance in early 2009, when the recession and financial crisis were still destroying jobs at a furious pace.
- Historically, recoveries from recession have generally been faster than this one. The chart in the upper left hand corner of this article shows Labor Department data in a chart from the Federal Reserve Bank of Minneapolis. (The link is here for those who want to explore the interactive charts more fully.) Setting aside the question of how deep the recession was, the current recovery (shown in red) looks tepid compared with three of the four recent recoveries shown for comparison. Note that in all the economic expansions that began since 1990 have started out "jobless," with many months of stagnant or declining jobs even as the economy had begun to grow again.
- Data tracked by the Minneapolis Fed also show that, so far, the US has regained only about half the net job losses that occurred because of the recession. This is the only time in data going back to 1948 that jobs haven't fully recovered by this time in a cycle.
- Former Massachusetts Governor Romney is correct that many people have dropped out of the labor force. Since the end of 2008, the civilian noninstitutional population over age 16 has grown by some 8.5 million people, but the labor force (those working or actively seeking work) has shown essentially no net growth.
Even Obama concedes that the job market has been disappointing.