Obama Claims 4 Million New Jobs

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Note: 2nd in a series on President Obama’s job creation record
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In Saturday’s weekly address President Obama said we’ve created nearly 4 million new jobs in the United States in the last 2 years.

Like Politifact, let’s fact check that claim in both numbers and in spirit.

The President is not as far off numerically as many might think… but he’s still “mostly false”.

Fortunately, the U.S. Bureau of Labor Statistics maintains enough data to validate(or invalidate) what the President says. But even better than that, the BLS maintains enough data to explain the true state of the economy that all ordinary folks already feel in their gut.

Job Number Creep

In the State of the Union Address on January 24th 2012, President Obama said:

In the last 22 months, businesses have created more than 3 million jobs.  (Applause) – Barack Obama, State of the Union, 1/24/2012

Job creation was so important in that speech that the White House link to the video includes a pretty graphic that clearly shows that 3.2 million new jobs had been created.

Thirteen days later, in an Obama campaign ad on February 6th 2012, the President said:

There’s more work to do, but you might be surprised to hear the progress we’ve made. Twenty-three straight months of jobs growth, nearly 3.7 million jobs added.
– Barack Obama, Campaign Ad, 2/6/2012

Now, in last Saturday’s White House Weekly Address, President Obama upped that number to “nearly” 4 million:

Our businesses just added 233,000 jobs last month – for a total of nearly four million new jobs over the last two years.
– Barack Obama, Weekly Address, 3/10/2012

President Obama claims 800,000 new jobs were created in the United States in the last two months.

That averages 400,000 jobs for January and 400,000 for February. Heck, in the heyday of the Clinton Administration we only averaged 230,000 new jobs a month!

How are Jobs Counted?

In the “State of the Jobs Address“, I did an in-depth analysis of the President’s job creation stats from his 2012 State of the Union address. In it, the ways the BLS reports job stats is explained… etc., etc.

I’ll cut to the chase…
An unemployed ranch hand in Wyoming doesn’t give a rat’s behind about his lost job not getting subtracted in the totals when a newly-hired, snot-nosed college kid gets a Wall Street broker’s job that is counted. He still lost his job, even if the guy doing the counting only counts non-farm jobs.

You have to count ALL jobs gained or lost for ALL eligible Americans to be accurate. The BLS does that. Its called “Labor Force Statistics from the Current Population Survey” (LU02000000).

This baby is comprehensive. It includes all non-institutionalized workforce eligible Americans that are 16 years old or older. The BLS is even lax on those standards. For example, Congressmen and other politicians, many of whom should be institutionalized criminals or lunatics, are still counted!

More accurate, more complete figures always come from the “current population survey”.

Tale of the Tape

Actual job growth in the last two years is around 3.5 million jobs. That is fairly close, but not the 4 million claimed by the President. The ironic reason for that being public-sector employment was excluded. The President doesn’t mention that.

To his credit the President this year has very consistently quoted statistics from seasonally adjusted private-sector employment – BLS report CES0500000001.

The problem is that the President’s report choice is woefully incomplete and an inaccurate look at the total employment picture. It erases about 30 million jobs. And being seasonally adjusted it suffers from seasonal adjustment errors. For example, it inaccurately shows 740,000 new jobs created in February alone. The BLS itself reported 227,00 actual nonfarm job growth in February.

Obama’s report choice shows total employment for February just under 111 million jobs. Total real jobs in the United States for February, taken from the current population survey, was just under 141 million. All public-sector employment is excluded from the President’s report.

The President ignores public-sector job numbers because they are declining!

The most incredible irony of all is that the President’s own Recovery Act(ARRA) was specifically designed to “create or save” public-sector jobs (mostly teachers), NOT private-sector ones.

More from the Current Population Survey

There are two important things that jump out from the average yearly job numbers over the last decade:

  • 7 million total jobs were lost in the recession
  • ZERO net job growth from 2009 through 2011

Its true there is now job growth as the economy finally sputters back to life from its 2010 low water mark, but it is far from healthy.

Everyone knows a relative, a neighbor or they themselves are among the long term unemployed. They don’t have to see stats to prove things are bad… but there they are.

You don’t hear this said much anymore, but a couple years back economists talked allot about a “jobless recovery“. Many folks are living it today!

This revealing chart shows the percentage of the eligible workforce who actually have jobs. They are “participating” in the workforce.

It includes EVERYONE. It counts everyone on unemployment actively looking for work. It counts all the long-term unemployed who’ve just plain given up looking. It counts all the new college and trade school grads who can’t find work.

In February this year, participation was at 63.6%. In other words, more than 1/3rd of eligible workers who could be working, aren’t. We all know them. They are everywhere.

As shown above, workforce participation is the lowest in 28 years!!

What Economists Say About Employment

Commenting on last Friday’s latest jobs report, Robert Reich said:

jobs aren’t coming back fast enough to significantly reduce the nation’s backlog of 10 million jobs.
– Robert Reich, “The Precarious Jobs Recovery“, 3/9/2012

Reich explains the current backlog is made up of 5.3 million jobs lost during the recession and another 4.7 million jobs that were needed just to keep up with population growth.

Speaking similarly while commenting on the January jobs report, Nobel Prize winning economist Paul Krugman said:

we’re 11 million jobs down — and we need at least 100,000 jobs a month just to keep up with working-age population growth.
– Paul Krugman, “The Soft Bigotry of Low Employment Expectations“, 1/6/2012

Conclusions

The President of the United States is the most informed human being on planet Earth. Stupidity is not one of Barack Obama’s weaknesses.

As President, Obama knows his claim of 4 million new jobs is incorrect. He has to know. He also has to know that public-sector employment is declining because of a bad economy.

There can be no other conclusion… President Obama has purposely cherry picked an incomplete BLS jobs report to paint a rosy jobs picture to make himself look better.

The BLS’s current population survey accurately portrays the real jobs picture in this country. It tells us there is job growth – 3.5 million new jobs since the darkest depths of the recession. But true participation rates and the average yearly job statistics over the last decade clearly show what everyone already knows… the economy is still deeply troubled and millions of Americans are suffering.

For those reasons President Obama gets a “mostly false” rating for his comments on jobs.

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About azleader

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

Posted on Mar 11, 2012, in 2012 Elections, Bureau of Labor Statistics, economics, Economy, Job Creation, Jobs, news, Politics, President Obama, State of the Union and tagged . Bookmark the permalink. 17 Comments.

  1. Excellent analysis, AZ Obama is clearly misleading the public while trying to make it look like his policies are working. I find it curious that employment peaked in 2007 but workforce participation began declining in 2001. Do you happen to know why that is?

    • Thanks for your kind remarks. The decline in workforce participation started because of the tech bubble burst back at the start of the George W. Administration. That is why we got the Bush tax cuts in the first place.

      Btw… I have a strong aversion to deception and factual inaccuracies!

      I’d been meaning to look into the 3.7 million job claim from back last month, so decided it was time given Saturday’s newest claim.

      The graphics I made from BLS data I downloaded.

  2. If you exclude government job losses, the President is correct. The private sector has added over 4 million jobs in the last two years while the government(state and federal) has laid off over 500,000 around the same time span. Even your BLS data notes the difference between government and non-government payrolls.

    I disagree that government employees are being laid off due to the bad economy. If the economy were so bad, then the private sector wouldn’t be adding over 150,000 jobs a month…

    • Disagree all you want, but it does not change the fact that public employees are being laid off because tax revenues are down and tax revenues are down because fewer people are working and fewer are working because the President’s economic policies, especially ARRA, have been ineffective.

      The main thrust of ARRA was to save public sector jobs!

      It saved mostly 330,000 K-12 teacher and less than 100,000 other state and local public sector positions for two years or so. When ARRA stopped paying public sector job salaries those jobs started disappearing. That is why 500k jobs have been lost.

      Here is what President Obama accomplished with ARRA…
      As of this minute ARRA has “created/saved” 162,870.31 jobs(FTE over the last 3 years) at a cost of $283,039,277,096. The cost per job is $1.7+ million per job.
      http://www.recovery.gov/Transparency/RecipientReportedData/Pages/RecipientReportedDataMap.aspx

      That isn’t particularly effective or efficient spending of taxpayer dollars.

      President Obama got a raw deal coming in when he did. It may very well be that no president could turn things around very fast.

      President Obama’s sin is that he said he could fix it and now is pretending he did by presented an incomplete picture of the real jobs situation.

      The bottom line…
      The President is vastly exaggerating his economic record, ignoring the true jobs picture in this country and incorrectly assuming credit for private-sector job growth his policies did not create.

  3. Once again, the “spin” is turning so fast that my head is spinning. The Obama administration essentially “lies by omission.” If people would look further into his report – other than just taking him at his word and his words not being corrected by his protective mainstream media (Pravda) – they would get to the “real” facts. The “job spin” is no different than the spin they have put on the gas prices. To “really” see the hypocrisy and spinning of the left, google “gas price hypocrisy” and check out the Don Smith Show video (short) and you will be amazed at how Hillary and Obama are exposed for the hypocrites they are. Incredible! If voters were informed voters, the only votes Obama would get would be his own, Michele’s, and Barack’s drunken-driving illegal immigrant uncle.

    • To steal a phrase from CNN’s Anderson Cooper… I’m “keeping them honest”.

      Later today I will be uploading another article in this series. It analyzes a job creation claim made by the President yesterday (6/14/2012) at his major speech on the economy in Cleveland, Ohio.

  4. Joshua Zambrano

    I don’t know that one can say Obama inherited a raw deal. Congress was run since late 2006 by the Democrats. And Obama voted for Iraq War funding – Department of Defense spending shot up $200 billion during this time, from $505 billion to its present mark around $700 billion. Obama voted for a free trade agreement with Oman, for Bush’s bailouts, and for Bush’s budgets. Democrats ran Congress that last year of Bush’s presidency and Obama voted for Bush’s legislation in CNN’s article, “Obama and Bush are not so far apart”. While public debt grew almost 3 times as fast under Bush as it did under Clinton, under Obama it’s been growing almost 3 times as fast as it did under Bush.

    • President Obama did, indeed, inherit a VERY raw deal. The economy of 2009 was something no one should be saddled with on their first day in office.

      When given lemons, though, make lemonade.

      President Obama, unfortunately, has not yet not made lemonade. 😦

  5. damienlehfeldt

    Reblogged this on Economy and State and commented:
    More lies from the President

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