“State of the Jobs” Address

Note: 1st in a series on President Obama’s job creation record
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——————————————————————————————————————————–Job creation is the #1 issue in campaign 2012.

President Obama thought it politically so important that a chart showing his record of job creation is included in the White House link to a video of the State of the Union Address.

In the tradition of Politifact, if you dig deeper you’ll find the President greatly exaggerated his job creation record.

The President cherry picked his data to make his record of job creation look FAR better than it really is.

For assessing the State of the Union, President Obama left out crucial data for an accurate judgement.

What President Obama Said

In the State of the Union (SOTU) the President made this claim about job creation:

In the last 22 months, businesses have created more than 3 million jobs.  (Applause)

Where, exactly, did the “more than 3 million jobs” figure come from?

The use of the word “businesses” is germane to the President’s misrepresentation of job growth.

The President’s Data Source

The Bureau of Labor Statistics (BLS) is a branch of the U.S. Labor Department. It provides several important ways to show general job creation statistics. Among them are:

  • Total Private-Sector Employment (about 110 million employed)
  • Total Non-Farm Employment (about 132 million employed)
  • Total Employment over age 16 (about 140 million employed)

Of those ways the BLS lists the data two fundamentally different ways:

  1. Seasonally adjusted by month
  2. Not seasonally adjusted by month

Therefore, the BLS provides at least 6 different ways to present general job creation statistics.

Not surprisingly, the largest number of jobs listed is for total employment. The smallest is for private-sector employment.

It takes data forensics to precisely identify, but the President chose seasonally adjusted total private-sector employment to highlight his accomplishments, not the much larger total employment.


Widely varying BLS statistics

Looking at the 6 different ways the BLS lists general job creation statistics you will find an astounding difference in results.

For example… for total private-sector employment, not seasonally adjusted, you will discover the BLS shows there are 5.4 MILLION jobs created instead of just the 3 million jobs claimed by the President over the same time frame. That is much, MUCH more!

You will also discover that for total employment over age 16, seasonably adjusted, that the total number of jobs created over the same time frame is 2.1 MILLION jobs.

The other categories are all over the map.

Though heartening that all show growth, which number is right? What makes sense?

Private-Sector vs. Total Employment

The President’s election year SOTU chart shows a very steady improvement in job creation starting the very month he took office… isn’t that politically special?

If generally true in the total economy it would be very, VERY meaningful. Unfortunately, it is not true.

Also, picking private-sector employment to highlight his accomplishments is not only misleading, but counter-intuitive to the “stimulus” bill the President himself credits for his success!

The Real Numbers Speak!

Total Employment Over Age 16

This chart is like the one in President Obama’s State of the Union address shown in the first graphic.

The only difference is it shows total employment over age 16, not just private-sector growth. This chart  presents a much different and more accurate view of job growth than does the other one.

As you can see… it paints an entirely different portrait.

Private-sector jobs only represents about 2/3rds of the nation’s total job picture.

This chart shows two startling differences from the President’s:

  • There has been only 2.1 million total jobs created in the last 22 months
  • There has NOT been 22 continuous months of total job growth

The Clinton Standard

President Bill Clinton is much praised for creating 18.4 million jobs at a 2.3 million per year clip during his 8-year term. The above chart shows that achievement in annual job growth statistics.

Clinton’s numbers are correctly based on total employment over age 16, not private-sector growth.

Clinton’s accomplishment would be much less impressive if only private-sector job growth were included.

If held to the Clinton standard, as shown on the right, President Obama has created no jobs!

Through no fault of his own, 5.5 million total jobs were lost (annualized) in President Obama’s first year. But in the last two years, after his economic policies were fully implemented, there has been a net LOSS of 8,000 more total jobs.


President Obama specifically cherry picked private-sector job growth to highlight in the State of the Union because it makes his record look far better than it really is.

The great irony of the President’s choice is that over the last three years the 2009 “stimulus” recovery package, ARRA, is responsible for virtually zero direct private-sector job growth.

At the government’s own Recovery.gov web site, you find that the vast majority of jobs “created or saved” were “saved” public-sector jobs. By far, the biggest chunk of “stimulus” jobs saved were 330,000 existing teachers for a two and a half year period.

Most private-sector jobs created under ARRA were temporary “shovel ready” construction jobs that disappeared when the money ran out.

TARP, and action by The Fed and ARRA combined to softened the recession’s blow and prevented something much worse.

ARRA, however, did not create jobs. That is why, in the last two years, there has been a net loss of 8,000 more jobs.

The good news, though, is we really have turned the corner. The President’s private-sector job growth figures prove that recovery is under way.

Total jobs hit their nadir in 2010. There was a net gain of about 805,000 total jobs in 2011. That overcame large 2011 public-sector job losses at all levels – federal, state and local.

As the economy continues to sputter back to life, public-sector jobs will start coming back to.

All of that growth will have little to do with government policy. Government action is tapped out. The private-sector is leading the charge.

The private-sector is who we should have applauded at the State of the Union!


About azleader

Learning to see life more clearly... one image at a time!

Posted on Jan 29, 2012, in 2012 Elections, bailouts, economics, Economy, Job Creation, Jobs, news, Politics, State of the Union, TARP. Bookmark the permalink. 8 Comments.

  1. Good info and well written, though I do disagree with the one conclusion that we are adding more jobs than we are losing (when you really drill down the all the numbers) and the economy, ‘sputtering back to life’, is really not on a sustainable upward improving trend, yet.
    Too many key indicators show no signs of true improvement so far.

    • I wrote another article that kinda speaks to your disagreements:

      That article is about a theory I call set-point that suggests every recession results in permanent job loses – about 5.5 million in this last one – but then an economy returns back to its previous growth levels (its set-point) and starts growing again… independent of government economic policy.

      I believe the economy is now turning the corner to return to it’s previous set-point growth pattern.

      Its hard to argue against an improving economy when:
      1-Real GDP surpassed its 2008 pre-recession peak by Q2 2010
      2-There were 805,000 more jobs at the end of 2011 than at the beginning
      3-Private-sector job growth (2.1 million) is the harbinger of any real recovery
      4-Unemployment is inching slowly downward from its 10.1% high

  2. I Yes, good analysis of recession-growth cycles.

    Although, can I ask where is the evidence of point 2.
    If you are citing BLS figures, then the data is suspect for now.

    And, the current U3 rate is over 11%.
    So point 4, it is incorrect, for now.

    • Yes… you may ask.

      I calculated the 805K from data downloaded from the BLS… report LNU02000000… non-seasonally adjusted, TOTAL EMPLOYMENT over age 16.

      Non-seasonal was picked specifically because those are raw, actual numbers; not calculated seasonally adjusted ones. The yearly average of raw numbers for 2010 was subtracted from the yearly average for 2011 to get 805K.

      Why should that be suspect?

      I just looked… report LNU04000000… the current (January 2012) U-3 rate for non-seasonally adjusted total employment over age 16 is 8.8%. That rate hit its peak in January 2010 at 10.6%.

      We may be talking about different numbers from different sources.

      If you have a better data source than I used please tell me what it is. I will correct any errors I’ve made.

      • Well, what the ST Louis Fed is doing is regurgitating the BLS’s figures with an implied decreased lfpr. When you count the amount of real workers (not vanquished by the BLS) the participation rate should be around 65% (which has been the steady average since the 80’s) with the new ‘fudged’ lfpr at 63.7%, you get the synthetic 8.3%. Add in the new census population data and January’s figures are nothing but skewed. The fact is, UE is above 10%, could even be as high as 15% and U6 is above 23%. Think about this, non-farm payroll jobs reportedly increased by 243k while the number of people dropping out of the labor force was 1.18 million. That is a plus 4-1 ratio.

      • I have to admit… I haven’t a clue what you are talking about.

  1. Pingback: Obama Claims 4 Million New Jobs « Inform The Pundits!

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