This has all happened before. Remember back to March through May of 2010, when the economy was adding an average of 316,000 jobs per month. Obama immediately tried to work it to his advantage. He traveled to the swing state of North Carolina to point to the job numbers as proof of the merits of his economic policies.
“Today is an encouraging day,” Obama said. “We learned that the economy actually produced a substantial number of jobs instead of losing a substantial number of jobs. We are beginning to turn the corner.”
Were those numbers real, America would have been well on its way to full employment and real economic growth. They weren’t. The decennial Census propped up hiring with temporary jobs, but when those jobs went away the economy lost 167,000 jobs. We hadn’t “turned a corner” so much as pulled a U-turn.
2011 followed a similar script. Early-year job growth (between February and April the economy added an average of 246,000 jobs) appeared quite strong. The economy appeared to finally be getting on track.
Obama’s team was once again spouting off about their success in guiding the economy out of a disaster. “For two years, President Obama and Congressional Democrats took bold steps to get the economy back on track – and today’s jobs report is a sign our actions have moved our country in the right direction,” Minority Leader Nancy Pelosi said in April.
“This sign of jobs growth shows the President’s economic plan is starting to work,” added Sen. Charles Schumer (D-NY).
But it was all another mirage. Over the next four months job growth averaged a meager 80,000. That’s not nearly the level of growth needed to add jobs for all of the new entrants to the workforce each month (think graduates and immigrants), much less actually put a dent in the recession. As it turns out the Obama economy, to the extent it was “starting to work,” still had us pointing in the wrong direction.
Which brings us to this year. After a few promising jobs reports, the “recovery” appears to have once again stalled out and the economy is plummeting, without an engine, towards earth.
In March, three strong jobs reports had economic forecasters thinking big, predicting 205,000 jobs would be created. Then reality hit, and the actual report showed the number was actually only 120,000.
Chastened by reality, the median forecast among polled economists in April was 160,000. Even those lowered expectations for the recovery turned out to be dramatically overoptimistic. In a sick April Fool’s joke the economy added only 115,000 jobs, the worst month of 2012.
If we continue adding jobs at the pace we did in April the unemployment rate would remain above 7 percent as late as 2026 – a whopping 14 years from now. Even if the economy grew at the average of the first five months (including the inflated levels of early in the year) it would take a distressing eight years and six months to reach what economists consider “full employment” where unemployment is between 4 and 6 percent.
Despite the obvious weakness in the economy Obama will no doubt tout the fact that the unemployment rate continues to fall. That is nothing but statistical sleight of hand. The only reason the unemployment rate ticked down to a still-high 8.1% was because people continued to drop out of the workforce at an alarming rate.
According to James Pethokoukis if the U.S. labor force was the same size as when Obama took office the unemployment rate would be 11.1 percent. Even if you accept that the aging of the Baby Boomers make for natural workforce shrinkage by taking demographic changes into account the real unemployment rate would be 10.7 percent. Not exactly cause for celebration.
Foolhardy optimism followed by inevitable stagnation. That’s what you get in the Obama economy.