Scipio

From Paul Krugman's column.

The point here isn't whether or not a job recovery will take place in the next year or two, but rather, that the administration has been putting out wildly inaccurate job growth predictions for going on 3 years.

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Paq

Ok...from looking at this, i could see them saying, "Ok...9-11 happened, people are going to be out of work, it's a natural downturn, etc.. and 2002's projections were out the window bc of that...
2003's looks like a case of "well, the worse is over, it's going to get better"...but i have no idea who thought it would increase like that after being on a steady decline...

2004's..just no..not happening..i can'te even begin to explain that one, to experience that type of growth would mean to move something like 1995's growth to present day. Heck, that is even sharper than the 99-2000 actual increase. I think the person who came up with that one needs to be kicked or fired...

MAYBE by 2005, the job growth will be at the july rate in 2004, but i'm not counting on it, judging just from that one graph.

I really hope i'm wrong, i need a decent job other than waiting tables and freelance stuff

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Kadath

At least the predictions are getting closer. And what's with the angle in the 138.3 prediction? Is that just so the line wont cross the graph title?

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tecoyah

Yeah.....and we are winning the war on terror, drugs, and poverty. Just ask the government, if you want great news.

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Paq

well, i mean, just looking at this graph, it seems like everyone is saying, "Oh, TOMORROW, the jobs will just spring up"

and it did that every year, nothing in the graph suggests that it would happen at all...

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mml

You know, I never know what to make of these kinds of graphs/statistics. So often there are caviats and ommsions that make the information seem worse than it is or better than it is. That being said, it is a sad statement about the economy and a telling statement about the Bush Administration and its efforts to obfuscate the actual the reality that they have done a poor job of creating jobs. If this were the only policy area where is seems as though they made "judgemental errors" I would not be quite as upset. However, it seems that whenever as situation arises that doesn't match their goals or desires they tend to "muddy the waters" in an effort to cover up the facts.

As someone who is looking for a new job, this hits home pretty stongly.

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onetime2

You're right, nothing in the graph says it because it was designed to look that way. Gotta love charts that take a relatively short snapshot of the historical trend and then make sweeping generalizations.



Above is a chart that looks at the non farm job trend from 1994 through today. I've added a simple linear trendline which remarkably jumps up right at the same point where Bush's "Wishful Thinking" comes in.

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Paq

Ok....
i'm thankful for the 94-2000 extension of the graph...

But..that really doesn't help the bush argument. It does, however, show where the job growth projections come from, but one would think the 'expected' line would be updated..

Thanks for the extension though, it's a morale booster for the current times...

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onetime2

No problem. The expected line was updated, in '03 and '04 so I'm not sure what you mean?

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Paq

doh doh doh
sorry

your'e right, but i meant the angle, not the ultimate destination. Sorry about that. you're right that it was updated, i just meant that the increase angle looks similar between the two when nothing justifies that.

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Scipio

Gotta love how a chart says one thing and people just assume it says something else, when it actually doesn't.

The claim: The Bush administration has, over the last 3 years, made claims about future job growth that have been both extremely optimistic and extremely wrong.

Extrapolating the graph back 5 years adds nothing. Unless you want to argue that the Bush administration has been expecting rates of job growth that surpass the unprecedented job growth of the Clinton years.

My graph looked back 5 years. You called that a "snapshot." Am I missing something here? If you go back to 1994 instead of 1999 (which you wouldn't do since you're only looking at Bush), isn't that just 2 snapshots? Doesn't your own graph fall prey to your own dishonest arguments?

In short, my graph makes claims that are limited, and not "sweeping." It covers 5 years, and is not "a snapshot."

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Paq

I have a bad habit of thinking of 1998-2000 as being yesterday...i forget that that's actually five years...

Still, another 5 yrs can't hurt, but i don't think the previous 5 yrs justifies the incredibly optimistic outlook on job creation that was predicted..

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urpimpnes

I recently lost my job from outsourcing. Wasn't the idea of giving tax breaks to businesses to create more jobs not outsource them?

onetime2

It can be justified depending on your beliefs about the market. The assumption being made by the administration (and most economists) is that the dam will burst so to speak. Once hiring starts it will take off. The thinking can certainly be debated but right now most theories say that jobs are always a lagging indicator and that as the economy continues to grow, companies will be forced to hire.

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onetime2

Adding 5 years says nothing? It's obvious that it gives a completely different picture than the one you point to. The overall trend in non farm job growth is far steeper than the snapshot you point to.

The trend in the job market is not limited by who the President is. Of course, when you only want to prove that the President is failing rather than understand the real data, I can see why you would limit it.

Ten years offers a far better picture than the 5 years you point to. Of course, I could have added data back beyond 1994 but the overall trend is the same. Rather than cutting the data points off to prove inaccurate analyses, I did it for the sake of convenience. Using a monthly data set for much more than the ten years I showed hits the limits of Excel's number of columns. (I could have fit maybe 20 years of data before reaching the limits)

Here is what the trend looks like from 1970 through 2004...

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onetime2

"Outsourcing", as currently being described by the press, is not new and it will not be ended by tax breaks. All tax breaks or laws restricting the ability of companies to "outsource" do is delay the inevitable. US companies competing on a global scale (as more and more companies do) will be at a disadvantage to other international companies who make use of "outsourcing" to lower their production costs. The choices for the company are either to take advantage of the lower production costs or cede that advantage to competitors and allow them to take market share from you through lower prices.

If there was an advantage over cost to keep the jobs here (quality, efficiency, or security for instance) then the situation would change. I think it's too early to say whether the "outsourcing" trend for more professional positions (like IT) will be successful. The trend may shift back to the US in coming years if there are significant limitations to it (lower skilled labor, less quality, risk of political unrest, etc).

Of course none of this helps you in your current situation. I certainly am not trying to minimize your situation but am simply trying to give an overall description of what's happening.

Good luck in the job search.

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Scipio

Why are you telling ME what I'm trying to prove?

For the third time, I only assert what the graph does, which is that the Bush administration has made 3 wildly inaccurate claims about future job growth. The record bears out the claim that they were assuming what happened in the past would happen again (as you pointed out, and which isn't unreasonable), and somehow got it wrong. Three times. Again and again.

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onetime2

Obviously it's not your graph and I'm not saying you are trying to prove anything (although your posting of it is for a reason and it doesn't seem to be presented in terms of what we should do about inaccurate forecasting). The writer of the article by cutting out the long term trend is obviously trying to paint a picture that proves his point.

The article (or more specifically the op-ed piece) is totally biased, draws completely inaccurate conclusions by looking at limited data, and claims that "Economic forecasting isn't an exact science, but wishful thinking on this scale is unprecedented. " which is total bullshit.

The opinion piece details how unrealistic the forecasts are and ignores the fact that the long term trend shows precisely the same things on roughly ten year intervals.

The forecasts are perfectly legitimate. They have obviously been wrong, but the increases they expect have basing in historical fact. How many forecasts available today will accurately predict when the uptick in jobs will come? There are a few out there which I'm sure will be dead on, the question is which one?

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Scipio

There are reasons for thinking that the current economy might not reflect what has happened in the past. Certainly, the downturn in job growth is unprecendented. If our main means of predicting the future is the past, we're in a situation we haven't been in for quite a while.

Sure, the growth predictions might put us back on that 20 year slope, but that doesn't mean they're realistic as predictions. Morever, the administration never bothered to look at reality, and instead kept saying, "help is right around the corner!" They were just assuming of course. We don't have much evidence, but you know, the past does have a tendency to repeat itself.

The administration also did things like predict that, over a year, we will recover 2.6 million jobs. Hmm. Isn't that roughly the number of jobs we lost over the Bush years to date? Wouldn't it be convenient if we got back 2.6 million jobs? What a coincidence.

As far as I know, that IS how they make their predictions, as wrong as they've been. An ability to make educated guesses based on what's happening today is sorely lacking.

Is it their plan to keep putting out these predictions until they happen to be right? Then, when and if that happens, "We knew it all along! See, just like we said!" Sure, he's the president, and he has to be optimistic, but wouldn't it be honest of him to come out and say, "Look, I can't control the economy. Things might get a little worse before they get better, but I'm doing everything in my power to make things right."

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onetime2

Can you point to reasons that the current economy is somehow vastly different than the past? I can think of two or three reasons that certainly impact it but they don't necessarily redefine the economy in the short term. Economic fundamentals change over time, there are rarely, if ever, clear trend breaks. The few breaks that do occur can only be identified when looking back with some perspective.

The downturn in job growth is not unprecedented...



The chart above shows the number of unemployed from 1970 thru today. There are clearly jumps which are more severe.

The predictions are certainly "realistic" in the sense that there are firm mathematical and historical reasons why they are forecast. Despite what you believe, they do not just pull the numbers out of the air to justify themselves. They most certainly choose from the ones that fit their general beliefs and will always pick the ones that make them look most favorable (as every politician does). This doesn't mean that they aren't valid forecasts.

Most people believe that we will continue on along that 30+ year trendline. (I have my own theory, but we're simply discussing the overall trend and the forecasts of the President's advisors.)

The thinking along the lines of the 2.6 million jobs gained in a year goes with the dam bursting theory of job creation which puts emphasis on the employers holding out until they absolutely have to hire new people. At the point where they can't hold off any longer some believe demand for employees will go from 0 to 200 mph. Not everyone buys into this theory but it's certainly not just the President who is proposing it or buying into it.

As for your last statement,

"Look, I can't control the economy. Things might get a little worse before they get better, but I'm doing everything in my power to make things right."

God I wish he could. Economic growth has become so politicized that any statement like that would be suicide for a politician. Bush's opponents (and I'm just looking at this objectively, you could substitute Kerry's name just as easily if he was the incumbent) are already deriding him as the cause of the "horrible economic times" and voters only want to hear about what politicians will do to make things better not about how they can't control things.

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Tomservo

Onetime2- the # of unemployed has *nothing* to do with the argument raised here. Unemployed does not equal jobs available, just as it doesn't equal *jobless*.

Unemployed simply means folks who are considered "actively looking for work" that are jobless. If you fall off of the rolls of "actively looking for work", you're not counted any more. The unemployment numbers dip as people are shaved off the list of "actively looking". Just as the "quaterly growth" levels aren't as they seem- they're composites based on current growth, if growth remains at a steady rate over the entire quarter.

Don't let stats fool you. # of jobs, and type of jobs are the only stats you can rely on here.

onetime2

The discussion here has primarily been about the number employed, not about the unemployed.

I brought the unemployed chart into the discussion because there was a claim that the losses are "unprecedented", which they aren't.

Further, it can not be assumed that all those coming off the unemployed "rolls" are frustrated workers who can't find jobs, there are countless reasons for workers coming out of the workforce from raising children and retirement to switching careers or taking a break from work while living off severance packages or savings.

In relation to the overall number of those employed and unemployed, the numbers who leave the workforce is small and the numbers leaving because they're frustrated by unfruitful job searches is even smaller.

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Kadath

You came back to this after an 18 day break?

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onetime2

I was looking for a specific job number for something else and knew I had put them into this thread. I lost my hard drive at work about a week and a half ago and no longer have the data files. Since I was on the site anyway I figured I'd kill two birds so to speak.

Then I saw the last post and, well, you know I just can't seem to let sleeping dogs lie.

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Kadath

Right. Well, as much as I like the idea that some of the unemployed are happy to be so, isn't this is the worst rate of uemployment since Hoover?

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onetime2

Ummm no. Not even close.

If we simply take the average monthly unemployment rate for 2004, 5.6% (admittedly it's only two months of data but, by the vast majority of forecasts, that number will go down the rest of the year rather than up) and compare that to the average monthly unemployment rate in the years prior to 2004 going back to 1948, there are 26 years that come up with higher averages. That's 46% of the 56 years since the data has been tracked having higher rates of unemployment than we have now. Certainly if there are people frustrated with finding work in this economy, many more people were frustrated by unemployment rates averaging 9.7% in 1982, or 8.5% in 1975, or even 6.9% in 1993.

This chart shows unemployment rates going back through '48, obviously there have been periods of much higher unemployment.

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Kadath

You're right! It also sucked pretty hard during Reagan's tenure, and Bush Sr's, and Ford's.

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onetime2

There are probably very few Presidents who didn't see crappy unemployment/employment numbers in at least one or two years of their Presidencies.

Full employment is estimated to be around the 5% (plus or minus a percentage point or so) unemployment mark as there are always going to be some industries restructuring and some employees in the process of relocating, changing careers, etc.

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onetime2

Just thought I'd throw out the fact that we saw another 248,000 jobs added in May. That brings the total gained since January to 1,030,000. That's a net gain of 494,000 jobs since January of 2000.

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apeman

people always forecast things like this a little on the optimistic side, otherwise they'd probably make the markets panic. I know UK growth figures have been a tad on the high side the past few years.

ok, I buy the fact that the original graph is too short-term to conlclude anything useful from. I also buy the fact that a long term best-fit has a similar slope to the "optimistic" forecasts of the Bush administration. BUT the forecasts are still optimistic, I think.

to be fair there's probably not that much a president could have done anyway, given the world economic situation

(btw I personally don't like Bush's policies at all, I'm just trying to be objective here)

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onetime2

In all honesty, I think they may be too pessimistic now. Looking at other indicators like business spending, inventory levels, a number of international economies coming out of terrible times, continued housing and automotive sales, etc I could see the economy really start to take off. Well beyond the already impressive 4 to 4.5% growth we've been seeing.

I hope jobs continue coming back at a relatively slow rate (a couple hundred thousand a month is fine) rather than a mad rush (which is still quite possible). I know many companies have been holding off hiring because of concerns about the economy and consumers' ability to keep up the spending pace but businesses seem to have come to the conclusion that the market is really good and they may soon opt to really fill spaces. If that happens, I expect to see higher consumer spending (and more indebtedness) which, in the face of soon to be raised interest rates, makes for a potential disturbance. Additionally, the increased demand that would be set off by a "worker's employment market" means increased inflation.

Two primary limiting factors in job creation are health care costs and productivity. With increased productivity companies don't need as many people but I fear companies don't quite recognize that. The health care costs are still a big factor but companies are cutting their contributions to health insurance and opting to hire more part time or temporary workers to get around them.

Businesses just don't have a good track record of good short term actions. The general feeling in the workplace, I think, is that everyone is understaffed and hopes of growing business will be met with demands for more workers (even though it might take a while for the business to make use of the additional labor).

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Kadath

Yup. Unemployment stayed at 5.6% Total employment was 138.8 million in May. 138.8 million - .5 million = 138.3 million employed in January 2000. .5 million/138.3 million = 0.3% growth over 4 years. Booyah!

But to be fair, like apeman said, the President can't do much.

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onetime2

As opposed to the 3 million jobs the DNC claims were lost. .3% growth in the throes of a minor recession and unprecedented productivity gains. Booyah! for sure.

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