The economy is probably one of the most significant issues in America today, especially with an estimated 15M citizens who are no longer in the job market. And yet, there is a sort of nostalgia for the supposed 'good old days' under former president Bill Clinton when we were awash with an abundance of good jobs, but is this credit given to him somewhat exaggerated? In researching the matter by information supplied from the Bureau of Labor Statistics it reveals that the overall job market during the term of Bill Clinton to G.W. Bush was not extraordinary or the exception but followed the national trend for the most part since 1970 or even before that time.
The average job creation from 1970 to 1990 was a little over 1, 031,975 while for 40 years (1970-2010) it was 1,559,500 annually. The standard deviation from 1980 to 2010 was 1,021,840 jobs increase/decrease from the median value of 1,714,000 yearly. There were several job growth spurts above the nominal 1.7M (1996-1997, 1999-2000, and 2004-2005). The data suggests that the economy can absorb an extra 2M jobs or so but anything greater than that level tends to result in contraction as the economy was growing too fast and not sustainable at that rate.
This was especially true in 2000 when the national job growth doubled from the nominal 1.7M jobs to 3.4M; which was also an increase of 68% from the previous year. Because this was probably some kind of artificially inflated number or due to some market forces that cannot be explained, even by the election of G.W. Bush or 9/11, there was significant retrenchment from 3.M jobs created in 2000 to a mere 420,000 in 2001. It gets worse because there was a negative job growth in 2002 of -448,000 jobs that were no longer in the economy. Afterwards, there was anemic job growth well below the national trend. There was significant recovery in 2005 and 2006 (2.5M and 2.7M jobs respectively) but this was more or less making up for the previous year’s losses. Again, when there is too much rapid expansion of job growth in the economy in a given year or two this results in a pullback and readjustment back to the level that is sustainable overall, such as: 3,403,000+420,000-448,000 [2000-2002]=3,375,000/3=1,125,000.
Now, continuing the mathematical or statistical inferences: 1,251,000+1,516,000+2,478,000+2,687,000+1,620,000=9,562,000/5=1,912,000 [2003-2007]. In 2008 and afterwards the numbers are unprecedented because there has never been negative job growth like this since 2002, which would seem, at a first glance to be precipitated by the events of September 11, 2001 and the economic policies of President G.W. Bush’s first year in office, but that might just be too simplistic because it is doubtful that all of this could affect the $11 Trillion macro economy of the United States in such a short span of time. When President Obama came into office there was a negative job growth that saw shrinkage from +1.62M to -685,000. The trend continued to -548,500 (2009) and -813,000 (2010) and so when President Obama talks about creating 1M new jobs that figure doesn’t make up for the prior years’ loss of 1.36M jobs.
Another surprising fact in the BLS (Bureau of Labor Statistics) data calls into question former president Bill Clinton’s touting all the jobs that were created during his administration, but this is not necessarily all the facts. It is true that there was a fairly consistent and sustainable job growth during 1990-2000, but this was consistent with the national averages since 1970. In fact, during his first term jobs slipped below the national average at around -36.8% (1.9M to 1.2M on average). There were a couple of extraordinarily good years, namely 1997 and 2000 when the economy added an extra 1.0M to 1.4M jobs above the preceding year, respectively. During the presidency of G.W. Bush the economy grew between 2006 and 2007, adding 5,1M jobs total, above the national average for 2 years. So in essence both Clinton and G.W. Bush’s economic policies created more jobs in their second term but there is not as significant a difference as one might think.
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January 29, 2013