Analysts Expect a Weak Jobs Report Friday. Why that Concern is Misleading
November 2, 2015

 
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Next Friday, the Federal Reserve is expected to release it’s latest “Jobs Report” for October, and the expectation is that it will show underwhelming job growth of probably less than 130,000 new jobs created… a figure the GOP Presidential candidates are sure to pounce upon, citing it at every opportunity as “evidence” of a “weak Obama economy”. But is it?

The economy needs to create roughly 110,000 jobs a month just to keep up with “population growth”. That’s young people entering the economy for the first time and immigrants moving to our country. Anything over that is growth. In a bad economy that has seen a lot of job losses, low job growth is a very bad problem. But that’s not what’s happening here.

Low job growth numbers aren’t great when there are still a lot of people unemployed/underemployed, but just because the number of jobs created is low, it’s not always proof of a bad economy. Quite the reverse in fact.

Imagine for a moment that we miraculously hit 0.0% unemployment and every single “job-aged” citizen had a job. A company could advertise that they were hiring all day and not create a single new job because everyone already had one. The number of jobs created in that extreme scenario would be ZERO, yet we certainly wouldn’t say “zero jobs created is evidence of a bad economy” (at least no one SANE.)

So we’ve established that just because the job creation numbers are low, that’s not always evidence that the economy is doing poorly. But what does it mean in THIS case?

The same month Republicans will be pointing to next week (October) as evidence the economy is floundering under Obama also set a four year record for Stock Growth, with the Market rising nearly 1,000 points in just one month. This, following the disastrous crash of the Chinese Stock Market last August that sent shock waves around the globe. Yet the resilient American economy under Obama emerged virtually unscathed.

During the GOP debate last week, Carly Fiorina… whom like Palin & Bachmann before her… appears to get all her talking points from Right Wing Talk Radio (and then never bothers to fact check them), repeating the 2012 Romney claim that women have been particularly devastated by President Obama’s economic policies (You may remember this as part of his “binders full of women” gaffe), citing a 2012 stat that “92% of job losses from 2009 to 2012 were among women.”

There are a number of problems with that claim (that were already pointed out to Romney three years ago). First (as the linked video points out), you can’t blame President Obama’s economic policies for jobs lost in January 2009 when he didn’t take office until the 20th, nor before his policies were even passed by Congress in early 2009. The reason so many of those early job losses disproportionately affected women in Obama’s first term was because MEN were typically hit first, losing their jobs back when Bush was still president. Thanks to income inequality, men typically earn more and were the first to go. Lower-paying jobs more commonly held by women came later.

By 2012, the employment situation for women had rebounded under President Obama’s economic policies (a fact Fiorina was forced to concede last week) and have steadily improved ever since. So if your big talking point is how bad Obama has been for women and the facts end up proving otherwise, what else can you do but go on network TV and argue that the “facts” are on your side! (ibid)

The very idea that the GOP has a leg to stand on when it comes to “what it takes to create a successful economy” is utter nonsense. The “Gingrich Revolution” of 1994 retook Congress by campaigning on the claim that Democrats raising the top tax rate from 34.5% to 39.6% on top income earners would result in “another Recession” (the last one being the end of the Bush-I Administration) and destroy the economy. Instead, the exact opposite happened. The economy boomed and the Federal Government took in so much money it was able to balance the budget and start paying off the National Debt.

George W Bush, running for President in 2000, couldn’t very well credit Bill Clinton for the economy, so instead he credited the GOP controlled Congress… the same Congress that said raising the rate would be a disaster and then never attempted to repeal it. He told supporters that, while the economy was good, to “imagine how much better the economy could have been if only we had had a Republican president in charge with a Republican Congress for the last six years!” He cited our ability to start paying down the [National] Debt as evidence that people were being “taxed too much” (and why NO Republican will EVER pay off the Debt because the moment we have a surplus, they’ll use it as an excuse to cut taxes) and promptly undid the Clinton tax hike they said would crash the economy (but didn’t.)

So Bush got his Republican presidency with Republican congress… the EXACT SAME Republican controlled Congress under President Clinton that Bush credited with the booming economy… and it was an absolute disaster. As I’ve pointed out before, Bush & Cheney “talked the economy into a Recession”, and the DJIA had already fallen nearly 1,000 points by September 10th, 2001. Who did they blame for THAT? Bush? No. Perhaps the GOP Congress whom Bush credited for the Clinton economic boom? Of course not! No, THIS was “Bill Clinton’s fault!” His predecessor “handed him a Recession!” they railed. But unlike Obama, the economy never improved under George W. Bush the way it has under Obama.

By the time Bush left office, the Stock Market was actually LOWER than the day he took office (the only other time that has happened was under Herbert Hoover during The Great Depression) and his “jobs reports” revealed that we were hemorrhaging 700,000 jobs a month.

So when the “jobs report” with those low job numbers comes out next Friday, keep in mind that low job growth during a period of low unemployment isn’t terribly surprising, nor is it necessarily indicative of a weak economy. Could the numbers be better given our current situation? Of course. But the fact we have positive job growth at all despite a hostile Republican-controlled congress avoiding doing anything that might make the president look good in an election year, and despite the economic earthquake in China barely a month ago that rattled Europe to its core, any growth at all is quite remarkable…

…and is yet one more example of how Republicans just don’t understand basic economics.

(UPDATE: Report released today/Friday reveals the RW naysayers were full of crap. The US economy added 271,000 jobs in October, about 90,000 more than expected. The unemployment rate dropped to 5%. Serves me right for listening to them. – Mugsy)
 

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November 2, 2015 · Admin Mugsy · No Comments - Add
Posted in: Economy, Jobs, myth busting

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