The White House finally thought it was safe to talk about the economy again. Chastened by the public backlash over the self-congratulatory stance they took and the wildly optimistic economic predictions they made during the early years of the recovery (“recovery summer,” anyone?), the Obama Administration has been careful in recent years to toe a careful line: Discuss progress, but highlight uncertainty.
But the boy who cried wolf finally thought he saw a bull economy that would last. Monthly job growth for 2014 averaged 269,000 a month, the unemployment rate ticked down to 5.5 percent, and economic growth was slowly picking up.
“[W]e’re now in the midst of the longest streak of private sector job growth on record: 60 consecutive months, five straights years, 12 million new jobs,” the president told the City Club of Cleveland last month. “Now, this progress is no accident. First and foremost, it’s the direct result of you, the drive and determination of the American people. But I’m going to take a little credit. It’s also the result of decisions made by my administration . . .”
Not everyone shared President Obama’s enthusiasm. George Will, writing in the Washington Post, provided some perspective:
[T]he economy had gone 43 consecutive quarters without 5 percent growth, the longest such period since the government began keeping the pertinent records in 1947. And even with this third quarter, growth for 2014 was just 2.4 percent, making this the ninth consecutive year under 3 percent. During the recovery from the recession of 1981-1982, there were five quarters of 7 percent or higher growth, and five years averaged 4.6 percent growth.
There also was unmerited triumphalism about November’s job growth of 353,000. This was just the fifth month of 300,000-plus growth in the 68 months since the sluggish recovery began in June 2009. In the 1960s, there were nine months of 300,000-plus job creation — and at its highest, in 1969, the nation’s population was nearly 118 million smaller than today’s. In the 1980s, there were 23 months of 300,000-plus jobs, and the nation’s population in 1989 was 73 million smaller than today’s 320 million.
Will labeled the White House’s irresponsible self-adulation a case of “defining economic failure down,” and recent economic indicators suggest he was correct.
The month of March brought a slew of bad economic news. The number of Americans filing for unemployment aid rose to its highest level in nearly a year. Factory orders, which are often seen as a measure of a business’ future spending plans, fell for the sixth straight month. Fourth-quarter productivity declined markedly, a sign that employers may push new hires to work more effectively rather than continue hiring. Retail sales plunged unexpectedly, which is made more problematic by the fact that consumers should have more money to spend given low oil prices. And manufacturing growth suffered its fifth straight drop, an indication that retailers want to clear their shelves before placing new orders.
It came as little surprise then that the March jobs report was deeply troubling. While economists predicted job growth in the 245,000 range, the Bureau of Labor Statistics reported that total nonfarm payroll increased by a relatively meager 126,000. Sadly, the cause of the slowdown seems to have been caused by something more deep-seated than weather. Reuters reports:
Economists polled by Reuters had forecast payrolls increasing 245,000 last month. The small job gains could fan fears that the recent weakness in economic activity could be more fundamental rather than the result of transitory factors.
There was no sign that the weather had impacted the payrolls gain, though construction employment fell.
The labor market had largely shrugged off a harsh winter, a buoyant dollar, weaker global demand and a now-resolved labor dispute at West Coast ports, which have combined to undermine economic activity in the first quarter.
Also of note was the fact that January and February’s jobs numbers were revised downward, suggesting this may be more than a one-month anomaly.
Even President Obama appears increasingly aware that the job boomlet could be coming to a quick end.
“Our economy has been growing, we’ve got momentum,” Obama said Thursday. “But that momentum can stall. Because the economies in Europe are weak, the economies in Asia are weak, the dollar is becoming stronger because a lot of people want to park their money here, they think it’s safer, but that makes our exports more expensive.”
The president has been desperate to deliver economic good news for years. It appears, once again, he’s going to have to settle for explaining why the good news will have to wait.