The December jobs report out this morning from the Bureau of Labor Statistics showed a net increase of 156,000 jobs and an uptick in the unemployment rate to 4.7 percent. The participation rate was at 62.7 percent, about where it’s been all year. While monthly job growth averaged about 200,000 in 2014 and 2015, this year it slowed to an average of about 180,000, the worst annual showing since 2011.
The 4.7 percent unemployment rate is the lowest year-end rate since 2006, and December 2016 was the 73rd month of employment growth, the longest stretch of job growth since the statistics started being kept in 1939. That sounds impressive and, no doubt, President Obama will tout them in his farewell speech next Tuesday. But job growth was, while consistent, also consistently anemic considering that almost all of the Obama presidency has been a recovery from a very nasty recession (recovery began in June 2009). Such recoveries usually bring very brisk job growth. The unemployment rate would be much higher had the participation rate not fallen to its lowest level since the 1970’s during the Obama years. The number of people working part-time who would like to be working full-time remains stubbornly high, as does those chronically unemployed (i.e. for more than 27 weeks) at about 7.5 million.
One bright spot in December is that wages grew by .39 percent, up 2.9 percent for the year–the best in seven years and a sign of a firming jobs market. But wage gains for nonsupervisory employees since 2009 have been at the slowest rate in half a century.
Altogether, the economy under Barrack Obama has been, at best, a sluggish recovery. Steep recessions, historically, have been followed by steep recoveries, creating a V-shaped valley in the statistics. But the Obama years have been more a U-shaped valley. That resembles the recovery that began in 1933 rather than the one that began in 1982. The reason, in all likelihood, is that FDR and Barrack Obama used the same tactics to stimulate the economy: greatly increased government spending and high taxes on the rich. Ronald Reagan cut taxes sharply (while also increasing government spending).
The empirical evidence that cutting taxes stimulates the economy (and, thus, raises government revenues in the mid-term) is overwhelming. But for liberals, doctrine trumps evidence every time. That might not be totally unconnected to the dismal political fortunes of the American left in the Obama years.
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