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How weak is US job market? Depends on your numbers

Associated Press Modified: September 5, 2012 at 11:15 pm •  Published: September 5, 2012
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WASHINGTON (AP) — Is the U.S. job market dismal as Republican presidential nominee Mitt Romney says?

Or is it steadily improving as President Barack Obama contends?

Not to dodge the question, but both men are correct. It's all about how you slice the data.

Romney and his Republican allies like to point to the unemployment rate. It's stuck at 8.3 percent, compared with 7.8 percent when Obama took office. Most economists say "normal" unemployment is 6 percent or less.

Obama naturally prefers to stress the more than 4 million jobs the economy has added in the past 2½ years.

Neither figure fully illustrates the state of the job market — the pivotal issue for many voters in the final stretch of the election season. You have to consider other numbers, too.

What about the number of people who've given up looking for work and so aren't counted as unemployed?

Or the pace of layoffs?

What about the level of job openings advertised?

The job market began strengthening in mid-2010. That was about a year after the Great Recession officially ended. The gains since then have been steady but achingly slow. That's why nearly every gauge of the job market plays into a glass-half-full, glass-half-empty election debate.

Here's an overview of key numbers and the varying stories they tell:

— UNEMPLOYMENT

Romney and other Republicans have stressed that the unemployment rate has topped 8 percent for 42 straight months. That's the longest such stretch since government record-keeping began in 1948.

For Obama, this is probably the most threatening statistic. No president since World War II has won re-election with such a high rate. President Gerald Ford lost to Jimmy Carter in 1976, when the rate was 7.8 percent. President Carter was unseated by Ronald Reagan in 1980, when it was 7.5 percent.

Reagan managed to win a landslide re-election in 1984, when unemployment was a still-lofty 7.2 percent. But the rate had tumbled from a peak of 10.8 percent in December 1982.

A similar trend could benefit Obama. True, unemployment is historically high. But it's down from a peak of 10 percent in October 2009. Some economists argue that the trend in the unemployment rate in an election year affects voters more than the rate itself does. Presidents have won re-election even when unemployment was high — as long as the rate was trending down.

That said, Obama has a problem: The unemployment rate has stopped declining recently. It's now where it was in January. That could all change in coming months. Three more jobs reports will be issued before the election, including the August numbers that will be released Friday.

— JOBS

Obama and other Democrats point out that the private sector has added jobs for 29 straight months. And over that time, 4.5 million jobs have been added. By contrast, over roughly the same period after the first year of President George W. Bush's first term, only 1.3 million private-sector jobs were added.

But the positive trend for Obama depends on a carefully selected time frame. It counts job gains dating from February 2010. It ignores Obama's first year in office, when employers shed an average of 357,000 jobs a month. And by counting only private-sector jobs, Obama's claim excludes hundreds of thousands of layoffs by local and state governments.

Since Obama took office, the overall economy — including the public sector — has lost 316,000 jobs. Private employers have added only 332,000 jobs. Put all that together, and you're a long way from 4.5 million.

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