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On jobs, watch the trend

It's worth reading the reactions of the Wall Street Journal's panel of economists to the May job numbers. A lot of us have the tendency to look at each new month as a wholly separate slice of data and celebrate if it looks good and fret if it looks bad. They don't. Instead, they look at trends, and the surrounding months. Many of them take the May numbers in context of the April numbers, which benefited from good weather and a late survey and came in higher than expected -- possibly sucking in jobs that would've otherwise shown up in the May report.

The takeaway is best expressed by Naroff Economic Advisers, who say, "Don’t get too excited about month-to-month changes. Instead, watch the trend. So far this year, we have averaged about 100,000 new jobs each month with that rising to nearly 140,000 over the past three months. That is what many of us had expected when we talked about modest to moderate job growth this year."

By Ezra Klein  |  June 4, 2010; 2:47 PM ET
Categories:  Economy  
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Comments

Democrats are following the big picture, Republicans are looking for discouraging individual data points upon which they can pounce, as shown in the comment thread on the first posting on today's job numbers. "Pay no attention to the trend, look over there!"

No surprise.

Posted by: Patrick_M | June 4, 2010 5:00 PM | Report abuse

Well sure, that's how the political game is played. You cheer for your side and call the other side a lot of fools running the economy into the ground.

Democrats didn't give Bush credit at all for the 'trend' in 2004, despite the fact that his actually looked good. From July 2003 to July 2004, unemployment fell from 6.2% to 5.5% (reported August 2004). Bush was trying to say that unemployment was falling and that 5.5% isn't really all that bad. I don't believe Kerry gave him any slack on that. Bush unfortunately had even better comparables from the tech bubble which was easy to exploit. Payrolls were up by about 1.6 million over the same time horizon.

Unemployment is now 9.7%. A year ago it was 9.4%. Payrolls are down nearly 600,000 over the past year despite the 400,000 census workers.

The near term trend is a lot better and probably will even improve but don't think Republicans are going to let Democrats off with a 9.7% unemployment rate and 41,000 private sector jobs created with a free pass after the mugging Bush got when things were for the most part fine.

Posted by: justin84 | June 4, 2010 6:46 PM | Report abuse

"...after the mugging Bush got when things were for the most part fine."

Yes, we all yearn for those days of wine & roses under the brilliant stewardship of George W. Bush and his stupendous "strategery."

What a terrible mugging he received, but history will vindicate him, and they will start chiseling W's visage on Mount Rushmore any day now...I just know it.

Posted by: Patrick_M | June 4, 2010 11:12 PM | Report abuse

Throw out the temporary census jobs and you are left with 40,000 real jobs created in the month of may. Big whoop. The U.S. econonomy needs 125,000 new jobs created every month just to deal with population growth. 40,000 ain't going to cut it. So with trillions and trillions of dollars worth of new debt since Obama took office, what do we have to show for it? Almost 10% unemployment?

Posted by: RobT1 | June 5, 2010 1:11 AM | Report abuse

RobT1,

Did you read the post? (Watch the trend.)

Private sector job growth was 231,000 in April, 41,000 this month. That's 272,000 private sector jobs in the past two months: 136,000 per month during that two month period.

"The U.S. econonomy needs 125,000 new jobs created every month."

See above. We're exceeding that mark. We all wish we were roaring at a higher clip, and that might well have happened with a bigger stimulus with fewer tax cuts and more direct investments. But given the hole Obama started in, any job growth at all this soon is laudable.

And there has not been "trillions and trillions of dollars worth of new debt since Obama took office." Do your homework before you comment and present false facts, unless your intent is to intentionally misinform.

The period 2001-2009 was a lost decade for job growth in the USA, thanks to Republican economic "policy." We had job growth immediately before those years and now it is beginning to come back again.

Posted by: Patrick_M | June 5, 2010 2:34 AM | Report abuse

"The U.S. econonomy needs 125,000 new jobs created every month."

I might note that this is a low estimate, even for the Bush years. It's more like 150-200k a month. We're falling short badly.

Posted by: Klug | June 5, 2010 2:18 PM | Report abuse

following the trend line is fine as long as you're honest when the trend line is bad. Again as mentioned Patrick (and seemingly glossed over) we need 100-150k jobs to break even. We're treading water at best. Not exactly cause for rave reviews coming towards November no matter how you spin it.

The period 2001-2009 was a lost decade for job growth in the USA, thanks to Republican economic "policy." We had job growth immediately before those years and now it is beginning to come back again.

Posted by: Patrick_M | June 5, 2010 2:34 AM | Report abuse


For some reason I'm not so optimistic towards the Dems for the period from 2006-2016. I use those time frames because it starts when the Democratic congress took over and ends at the end of Obama's second term. Sure it'll look worse since the recession's in there but is it FAIR to start it now when we've basically bottomed out? Anyone can make statistics dance. that's what the spin doctors are for. And they'll keep spinning away no matter what party is in power.

Posted by: visionbrkr | June 5, 2010 3:20 PM | Report abuse

"For some reason I'm not so optimistic towards the Dems for the period from 2006-2016. I use those time frames because it starts when the Democratic congress took over..."

visionbrkr,

In 2006, Republicans controlled the entire government.

...sigh... I don't know why you folks always have it in your heads that a Democratic Congress took over in 2006.

The Democrats became the majority in the HOUSE of Representatives in 2007. The Republicans continued to have majority control of the Senate until 2009. So for the final two years of the Bush Administration, the Democrats controlled exactly one half of one of the three branches of government. The Republicans had all of the rest.

So, given that fact, why is it "FAIR" (your term) to start your time clock the year before the Democrats even had a majority in a single house of Congress? The Democrats did not control any branch of government and could not move their agenda until Obama's inauguration, and that took place in 2009.

And I have not "glossed over" anything. I have been saying that if you follow the trendline, we have been moving steadily in the right direction, and job growth (when averaged over the past two or three months) has been consistent with the trend and with expectations.

But (as you point out) partisan tribalism will always find a way to spin progress into bad news, simply because good news might always have been better.

Posted by: Patrick_M | June 5, 2010 4:02 PM | Report abuse

Patrick,

Look, the fact of the matter is that the economy was much better during the end of Bush's first term than it is now. It was better by a long shot. There were new jobs, and unemployment had been steadily declining for a year. Both the trend and, in retrospect, the level of both payroll jobs and unemployment were in good shape. It's all fun and well to make fun of Bush, and I'm certainly not one of his fans, but Democrats seem to have crazy blinders on when talking about the economy now as compared to what they said back in 2004.

I just don't see how any Democrats could say with a straight face that the trend is fantastic now but back in '04 the Bush economy was somehow an unmitigated disaster. Somehow Republicans are fools for focusing on bad things like 9.7% unemployment and choppy private sector job growth, and yet Republicans were also fools for focusing on solid job growth and 5.5% unemployment heading into the 2004 election.

Criticism of the Bush numbers as being in someway 'artificial' (it was cheap money, higher deficits, housing bubble etc) apply to the Obama Administration as well.

You can always say Bush's last year had a monster recession, but there will be a recession again and somehow I'm guessing the Democratic party line during the (for example) 2018 recession won't be to blame the failed policies of 2009-2017 that got us in this mess. Democrats generally didn't think it was fair (and they were correct) when Republicans blamed Clinton for handing over a weak economy to Bush.

The economy is cyclical, with some cycles being worse than others. You were wondering why Republicans are attacking Obama for a weak economy when Democrats could easily see 'the big picture' that there has been modest improvement in the last few months. All I'm saying is that you shouldn't be surprised. This is how the game is played, and why on Earth shouldn't the Republicans pile on when unemployment is at 9.7%? They'd be fools not too. If Democrats can attack Republican Administrations for 5.5% and declining unemployment, why wouldn't you expect Republicans to attack Democrats for 9.7% unemployment which has basically been static since fall of last year?

Posted by: justin84 | June 5, 2010 6:19 PM | Report abuse

"If Democrats can attack Republican Administrations for 5.5% and declining unemployment, why wouldn't you expect Republicans to attack Democrats for 9.7% unemployment which has basically been static since fall of last year?"

This is such a mindless dodge.

"...static since the fall of last year...." - you know that the economy shed jobs at a constantly accelerating rate from early 2008 until about a year ago, at which time the trend reversed in near perfect matching deceleration. The economy shed fewer jobs each month in a clear rebound, and now there is modest growth once again.

So sure, Republicans are free to make their campaigns arguing that 9.7 is too high. But that is comparable to the fellow that dug a deep hole (and then walked away) complaining that the other fellow who is filling in the hole (at exactly the same rate of speed) has not filled it fast enough.

We can remember the source of the hole.

You argue that 2004 was the good old days? Financed by the the construction boom at the beginning of the housing bubble following the 2002 recession and the squandering of the surplus? Big bogus trillion dollar Iraq war against the bogus WMD threat too? Miss all that?

Hint: nobody is nostalgiac for George W. Bush, or for Bush-o-nomics. Been there, done that, not good.

Again, Ezra's "watch the trend" post is what it is, and the numbers are what they are. A positive trend for job growth has been in place for over a year, following a long plunge.

Boo the positive trend if you wish, and tell us that we should recalibrate policy to the genius times of 2004. I think we know better.

Posted by: Patrick_M | June 6, 2010 4:14 AM | Report abuse

Patrick,

Once again, I'm not saying that I am for or against Bush or his policies.

All I have ever said on this is that Democrats shouldn't be surprised that Republicans are going to attack them hard on the economy. They were hard on Bush when unemployed looked bad compared to Clinton, despite a positive trend line that started when one of his major economic initiatives passed. Republicans are going to be likewise hard on Obama. It's just politics.

Posted by: justin84 | June 6, 2010 6:18 PM | Report abuse

"Throw out the temporary census jobs and you are left with 40,000 real jobs created in the month of may. Big whoop. The U.S. econonomy needs 125,000 new jobs created every month just to deal with population growth. 40,000 ain't going to cut it. So with trillions and trillions of dollars worth of new debt since Obama took office, what do we have to show for it? Almost 10% unemployment?"

I don't really see how you can look at an increase of over 400,000 jobs as a negative report. In terms of private sector only, the historical average in for census year Mays is a contraction of over 200,000 private sector jobs (pop. growth adjusted) as people temporarily leave the private sector for higher-paying census jobs. So this puts us around 250,000 private sector jobs better than average, and average for America over the past 50 or so years is pretty solid itself.

In terms of the whole "What did we get for our stimulus money?" line of thought, all Obama has to do is show chart 2 from:

http://www.bls.gov/news.release/pdf/empsit.pdf

and mark where the stimulus was signed.

Posted by: eggnogfool | June 8, 2010 2:28 PM | Report abuse

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