Commentary Magazine


Topic: economic growth

The Jobs Report

The news is better this month, in that 175,000 jobs were created in February, up from January’s 129,000 and December’s dismal 84,000. Economists had been predicting 152,000 new jobs. But the unemployment rate ticked up a notch to 6.7 percent because while the labor force increased, so did the number of unemployed. Partly that is because more people have started looking for jobs, which is a good sign.

The number of long-term unemployed, out of work for more than half a year, has increased by 203,000 to 3.8 million. That’s 37 percent of total unemployment. Teenage unemployment went up for the second straight month, to 21.4 percent. Black unemployment went down a notch, to a still distressing 12 percent.

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The news is better this month, in that 175,000 jobs were created in February, up from January’s 129,000 and December’s dismal 84,000. Economists had been predicting 152,000 new jobs. But the unemployment rate ticked up a notch to 6.7 percent because while the labor force increased, so did the number of unemployed. Partly that is because more people have started looking for jobs, which is a good sign.

The number of long-term unemployed, out of work for more than half a year, has increased by 203,000 to 3.8 million. That’s 37 percent of total unemployment. Teenage unemployment went up for the second straight month, to 21.4 percent. Black unemployment went down a notch, to a still distressing 12 percent.

Economic growth has been slowing. GDP was growing at an annual rate of 4.1 percent in last year’s third quarter, but was only at 2.4 percent in the fourth quarter. Some forecasters expect GDP in this year’s first quarter (which ends March 31st) to be perhaps as little as 1.5 percent. If that turns out to be true and the trend continues, future jobs reports will not look good.

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Obama’s Economic Calamity

The news this morning is, quite simply, catastrophic for the president. Economic growth in the second quarter slowed to 1.5 percent annualized from 2 percent in the first quarter. The economy is weakening as the election approaches. No one has ever won reelection in such circumstances. No one. (Harry Truman: 4.4 percent growth in Q2, 1948. Ike: 2 percent growth in 1956 Q2 after negative growth in Q1. Nixon, Q2, 1972: 5.3 percent. Clinton: 3.5 percent. GW Bush: 3.4 percent.)

Granted, things aren’t as bad for Obama as they were for Jimmy Carter; in the second quarter of 1980, the economy actually contracted by .7 percent. But in 1936, Franklin Roosevelt won a landslide despite the Great Depression; as Amity Shlaes noted yesterday on Twitter, annual GDP growth from 1933-1936 had averaged 9 percent. Nine percent.

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The news this morning is, quite simply, catastrophic for the president. Economic growth in the second quarter slowed to 1.5 percent annualized from 2 percent in the first quarter. The economy is weakening as the election approaches. No one has ever won reelection in such circumstances. No one. (Harry Truman: 4.4 percent growth in Q2, 1948. Ike: 2 percent growth in 1956 Q2 after negative growth in Q1. Nixon, Q2, 1972: 5.3 percent. Clinton: 3.5 percent. GW Bush: 3.4 percent.)

Granted, things aren’t as bad for Obama as they were for Jimmy Carter; in the second quarter of 1980, the economy actually contracted by .7 percent. But in 1936, Franklin Roosevelt won a landslide despite the Great Depression; as Amity Shlaes noted yesterday on Twitter, annual GDP growth from 1933-1936 had averaged 9 percent. Nine percent.

Perhaps the most interesting analogy is to 1992—a year in which the economy was actually staging a recovery from a recession in 1991. That was, you’ll recall, the year of “it’s the economy, stupid.” The annual growth rate in 1992: 3.4 percent. The incumbent president received 38 percent of the vote that year.

Prior results are no guarantee of future returns, of course. But this all gets to the central problem for the president: What case can he make for a second term with undecided voters?

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