How Good Were Today’s Jobs Numbers?

The Labor Department announced today that nonfarm payroll employment increased by a seasonally adjusted 227,000 in February. BLS also increased estimates of job growth for the two preceding months. The unemployment rate stayed at 8.3%.

Many hailed these numbers as signs of a reviving economy and good news for President Obama’s re-election campaign, especially since February was the third consecutive month when the economy added 200,000 or more payroll jobs. Certainly more jobs are better than fewer; however 200,000 new jobs per month are not enough to put the unemployed and the underemployed back to work. To illustrate the point, this chart, taken from Bureau of Labor Statistics data, shows the total number of employed Americans from September 2008 through today, in thousands:

You can see that the trend has been generally upward since early 2010. The problem, however, is that the pace at which jobs are being added is nowhere near as rapid as the rate at which they were lost during the recession, as you can see from the slope of the downward and upward curves.

The result is that the slow economic growth we are experiencing is not making a serious dent in the number of unemployed, as you can see from this chart, also drawn from BLS numbers:

As of today’s BLS report, there were 12.8 million unemployed, virtually identical to the number when Obama took office.

One hears a lot about discouraged workers and declining labor force participation; without those factors, the unemployment rate would be materially higher than it is. Another data point that is less commonly cited is the number of Americans who are not in the labor force because they are not actively looking for work, but would like to go to work right now if a job were available. This chart shows that number over the same period of time:

This number isn’t declining at all, but rather has risen quite steadily since late 2008. So, while today’s jobs numbers will be spun in a positive direction, the reality is that there are about the same number of people working today as when Barack Obama took office, despite population growth of around five million. And in January 2009, at the outset of the Obama administration, there were a total of around 18,480,000 Americans who were either unemployed or out of the labor force but ready to go to work. More than three years later, that number has grown to around 19,178,000.

Of course, developments between now and next November could lead to a more positive job growth picture. At this point, however, it is hard for defenders of the Obama administration to argue with a straight face that its policies have helped to put Americans back to work.