Bush speaks of job growth, endorses fuzzy math

[Patrick M]

Bush Pledges Steps to Spur Jobs, Business Growth

Sat Jan 17, 5:47 PM ET

By Caren Bohan

WASHINGTON (Reuters) - President Bush promised new measures to promote jobs and business growth on Saturday and touted his trillion-dollar tax cuts in what amounted to a State of the Union preview.

"Tax relief has helped turn our economy around," Bush said in his weekly radio address.

"Our economy grew at its fastest pace in two decades in the third quarter of 2003. Manufacturers are seeing a rebound in new orders in factory activity. More than a quarter-million new jobs have been created since August," he said.

Although GDP growth grew at a breakneck pace of 8.2 percent in the third quarter, many analysts view the job growth so far as disappointing.

The economy created just 1,000 jobs in December. Although it was the fifth straight monthly gain, it fell short of private economists' expectations for a gain of 130,000 jobs.

Bush will deliver his State of the Union address to the U.S. Congress on Tuesday night.

In the Democratic response to Bush's radio address, U.S. Rep. Mike Michaud of Maine cited figures showing the loss of nearly 3 million private-sector jobs since Bush took office three years ago.

"Democrats in Congress have made job creation a priority, offering a fair, fiscally responsible and fast-acting plan that would create 1 million new jobs," Michaud said.

"The president and the Republican Congress, on the other hand, have made it a priority to reward a few corporate special interests, at the expense of ordinary Americans," he said.

The president said he would unveil new economic measures on Tuesday, although sources close to the White House have said there are no plans for big new tax cuts.

DEFICIT A CONCERN

"We will work to expand opportunities for all Americans to own their own business. We'll press forward on an agenda of economic growth so that everyone who wants to work can find a job," Bush said.

Bush is expected to call on Congress to make his tax cuts permanent.

He may propose new ways to help Americans save money through accounts similar to a Roth IRA. Returns would be tax-free but the accounts could be used to save for a house or other purposes.

Also likely to be mentioned is a plan to help low-income people buy health insurance by offering tax credits.

Bush may also revive a plan to allow workers to invest a portion of their contributions to the Social Security retirement program in the stock market.

Democrats seeking to challenge Bush in the November presidential election blame his tax cuts -- which total some $1.7 trillion over 10 years -- for the budget deficit that is expected to top a record $500 billion this year.

They have also said the reductions have not done enough to revive job growth.

Some conservatives have expressed concern lately about Bush's proposals for spending on initiatives such as the moon-Mars expedition.

"(Bush) will have to do something to address the issue of the deficit," said Grover Norquist, head of Americans for Tax Reform and a close ally of the Bush administration.

Bush's budget director, Joshua Bolten, met on Friday with House Republicans including Budget Chairman Jim Nussle. Some conservatives in Congress have objected to proposed increases in spending and have pressed the White House to take a tougher line on cutting costs.

The White House has defended its approach, saying its fiscal 2005 budget will hold growth in spending for most programs to under 4 percent.
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OK, these are the parts I want explained:

"Our economy grew at its fastest pace in two decades in the third quarter of 2003. Manufacturers are seeing a rebound in new orders in factory activity. More than a quarter-million new jobs have been created since August," he said.

So more than a quarter million jobs (250,000+) have been created in the months of September, October, November, and December, correct?

The economy created just 1,000 jobs in December. Although it was the fifth straight monthly gain, it fell short of private economists' expectations for a gain of 130,000 jobs.

Let's break this down: in December, there were 1000 new jobs. This, however, was the "fifth straight monthly gain." I believe that implies that were were a maximum of 999 jobs created in November, 998 in October, and 997 in September.

So that's a *maximum* of 3994 jobs in those four months.

So how is that "more than a quarter-million"?

Ryan, help me out here.

[Rspaight]

That just means that more jobs were created than eliminated for five successive months, not that the increases were successively greater:

August: +35,000
September: +99,000
October: +100,000
November: +43,000 (preliminary)
December: +1,000 (preliminary)

For a total of 278,000 net jobs created since August. More than a quarter million.

Crowing about these relatively puny gains is a pretty misleading way to present Bush's record. In 2001, the net loss was 1,784,000. In 2002, we lost 463,000. In 2003, despite the net gains the last half of the year, we still ended up down 118,000 on the year. Total net loss for the first three years of Bush's term, therefore, is 2,365,000. By way of comparison, we had a net gain of 14,774,000 the first three years of Clinton's first term.

In fact, Clinton never had a year where fewer than 3,900,000 million net jobs were created. Bush has had three straight years of net *losses* and looks likely to be the first president since Hoover to have negative job growth over his entire term, unless we create 2.3 million net jobs this year. That would have been no sweat during the Clinton years, but even if this "recovery" continues creating jobs at the pace of the past five months, we'll barely crack a million.

All these fun numbers can be found here:

http://data.bls.gov/...

Ryan

[Patrick M]

Thanks for the explanation.

Where did the .sig come from?

[Rspaight]

http://www.nydailynews.com/front/story/ ... 5485c.html

[Patrick M]

From the link Ryan just posted:

"It's not our job to be sources. The taxpayers don't pay us to leak!" Card tells Auletta.

No, they leak identities for free.

[Rspaight]

Payroll growth below forecast
Payrolls expand for a fifth straight month, but gain of 112,000 below estimates; jobless rate down.
February 6, 2004: 11:51 AM EST
By Mark Gongloff, CNN/Money Staff Writer

NEW YORK (CNN/Money) - U.S. payroll employment continued to slowly improve in January, the government said Friday, in a report that disappointed Wall Street's hopes for a more vigorous recovery.

But the unemployment rate fell again, to its lowest level in two years, leaving a long-standing economic mystery unresolved -- is the labor market on the road to a full recovery, typical of past economic expansions, or will structural changes in the economy keep job growth anemic?

Payrolls outside the farm sector grew by 112,000 jobs, the Labor Department said, compared with an upwardly revised gain of 16,000 in December.

It was the fifth straight month of payroll gains and the biggest gain since December 2000 -- but only because higher gains in prior months were revised sharply downward.

The unemployment rate fell to 5.6 percent, the lowest level since January 2002, from 5.7 percent in December.

Economists, on average, expected 165,000 new jobs -- one forecast was for payroll growth as high as 300,000 jobs -- and unemployment at 5.7 percent, according to Briefing.com.

"This report is a slow boat to China, reflecting continuing business caution about hiring people," said Sung Won Sohn, chief economist at Wells Fargo. "Facing unprecedented competition from both domestic and foreign sources, businesses are still focused on productivity gains with as few employees as possible."

On Wall Street, stock prices ignored the disappointment and rose, but Treasury prices also rose, pushing interest rates down.

Fed on hold, Bush looks at bright side

The report seemed unlikely to inspire the Federal Reserve to move quickly to raise its key short-term interest rate. Typically, central bankers want to see much greater job growth for several months before they're convinced the economy is strong enough to withstand a rate hike.

"The report is certainly better than in December, but it just doesn't reflect the level of job creation we'd expect to see at this stage of the economic recovery, or the job creation the Fed would need to see to even consider taking that first step towards tightening," said former Fed economist Lara Rhame, now senior economist with Brown Brothers Harriman.

The report also did little to settle the vast discrepancy between the household survey, which produces the unemployment figure, and the broader establishment survey, which produces the payroll figure. The household survey -- which includes the self-employed -- said employment grew by nearly 500,000 people in January.

But Rhame said she estimates household employment is still about 3 million jobs below long-term trend growth, while payroll employment is about 4 million jobs lower than it should be.

The nation has lost about 2.35 jobs million since March 2001, the month the last recession began, the longest such stretch of pain since World War II. Nearly 800,000 of those jobs have disappeared since the recession ended in November 2001.

A weak job market could prove tough for President Bush as the November election approaches. When pushing for tax cuts in 2003, Bush promised his proposals would create 300,000 jobs a month, which hasn't happened yet and may not happen at all in 2004.

"We are a long way from getting back the jobs lost since President Bush took office," said Rep. Pete Stark, D-Calif., ranking Democrat on the Joint Economic Committee.

But Labor Secretary Elaine Chao, speaking to CNNfn, touted the falling unemployment rate, the growth of the labor force, and the fact that both payroll and household surveys showed growth in jobs.

"Today's news is good news," Chao said.

Revisions bring payrolls lower

Some economists had hoped that the Labor Department's annual benchmark revisions, applied to the last 12 months of payroll growth, would have raised the number of workers on payrolls, revealing thousands of jobs at new start-up businesses.

But the revisions actually drove the payroll total lower by about 81,000 -- though they did make January's payroll growth the strongest since 124,000 in December 2000.

"We need more jobs. It is accurate to say that job growth has returned, but it is not at an acceptable level," said Joel Naroff, president and chief economist at Naroff Economic Advisors in Holland, Pa. "We need over 200,000 a month to feel good about the sustainability of the expansion. That may be coming, but it is not here yet."

In its report, the Labor Department said payrolls in service industries such as education and health care grew by 105,000 jobs in January. Retailers added 76,000 jobs, but temporary help payrolls fell by 21,000, the first drop in nine months. Typically, temp hiring is a sign employers are gearing up to make permanent hires.

Manufacturing shed 11,000 jobs, the 42nd straight month of falling factory payrolls. The factory sector has lost 3.3 million jobs since early 1998, and many of those jobs are never coming back, having been moved overseas or made obsolete by technological improvements.

In fact, those sort of structural changes could be affecting more than just the factory sector, making this labor market different from those in the past, some economists believe.

"Today's labor market does not fit the mold of the old models," said John Silvia, chief economist at Wachovia. "The economy has recovered, and many of the old jobs are gone."

Weakness in the details

The Labor Department said the total percentage of people who have given up looking for work, who are unemployed but looking for work, and who are working part time because they can't find anything better held at 9.9 percent, near the highest level since 1996.

The percentage of people unemployed for 27 weeks or more rose to 22.7 percent, near the highest level since 1992.

Average hourly wages rose to $15.49 from a downwardly revised $15.47 in December. Average weekly earnings rose $3.76 to $522.01. Wage growth is crucial for consumer spending, which fuels two-thirds of the economy.

Unfortunately, the sluggishness of the labor market has kept earnings growth anemic. Average hourly earnings have grown by just 2 percent in the past 12 months, near the lowest level since 1987.

The average work week expanded to 33.7 hours from a downwardly revised 33.5 in December, indicating businesses increased activity. But the workweek's length is still the same as it was in October 2001, in the midst of the last recession, and is only one tenth of a percentage point above the shortest average workweek on record.

"This is not a good report, all things considered," said Richard Yamarone, chief economist at Argus Research.

[Rspaight]

Bush sees 2.6M new jobs
White House predicts the jobless cycle will end as 2.6M new positions are created in 2004.
February 9, 2004: 9:40 AM EST

WASHINGTON (Reuters) - The economy should shed its jobless label this year with the creation of about 2.6 million new positions, the White House forecast Monday.

If realized, the jobs turnaround could help President Bush's re-election prospects. Bush has faced withering fire from Democrats over the lack of new jobs.

In the annual Economic Report of the President, the White House said the number of workers on U.S. non-farm payrolls was likely to rise to an average of 132.7 million this year from a 2003 average it thought would come in at 130.1 million.

According to the latest jobs figures released by the Labor Department Friday, which incorporated data revisions, payroll employment averaged just 129.9 million last year.

Last year, the Bush administration was looking for the creation of about 1.7 million jobs. But the economy actually lost 53,000 jobs, bringing the total number of jobs lost since Bush took office to 2.2 million.

[Patrick M]

Ryan can check my math, but in order for the U.S. to create 2.6 million jobs in '04, we would have to average 226,182 new jobs per month (assuming 1/04 holds at 112,000).

The last time more than 225,000 jobs were created in a month was May 2000.

I believe January 2004 is the highest net gain in Bush's reign, and it still only represents less than half of what we'd have to average per month over the next 11 months.

[Rspaight]

Similarly ludicrous numbers underpin Bush's promise to cut the deficit in half in five years. In order for that to happen, we'd have to have revenue growth well beyond that which occurred in the late 90s.

Ryan

[Rspaight]

The White House today announced that they really don't expect to create as many jobs as they earlier forecast, the numbers don't mean anything, and the President doesn't know what the hell he's doing.

Support for Bush's leadership on the economy remains strong.

EDIT: It was just pointed out for me what's *really* ludicrous about this. Doesn't Bush always trumpet his Harvard MBA? Don't you have to study statistics to get an MBA?

White House downplays job predictions
Wednesday, February 18, 2004 Posted: 2:01 PM EST (1901 GMT)

WASHINGTON (AP) -- The White House backed away Wednesday from its own prediction that the economy will add 2.6 million new jobs before the end of this year, saying the forecast was the work of number-crunchers and that President Bush was not a statistician.

White House press secretary Scott McClellan, asked repeatedly about the forecast, declined to embrace the prediction which was contained in the annual economic report of the White House Council of Economic Advisers.

Unemployment and the slow pace of job creation are political liabilities for Bush as he heads into a battle for re-election. Despite strong economic growth, the nation has lost about 2.2 million jobs since he became president.

The jobs forecast was the second economic flap in recent days for the White House. Last week, Bush was forced to distance himself from White House economist N. Gregory Mankiw's assertion that the loss of U.S. jobs overseas has long-term benefits for the U.S. economy.

Asked about the 2.6 million jobs forecast, McClellan said, "The president is interested in actual jobs being created rather than economic modeling."

He quoted Bush as saying, "I'm not a statistician. I'm not a predictor."

"We are interested in reality," McClellan said

He said the annual economic report was based on data from about three months ago. Since then, Bush has said that things are improving.

The issue arose at the White House after Treasury Secretary John W. Snow and Commerce Secretary Don Evans declined to endorse the jobs prediction and said it was based on economic assumptions that have an inherent margin of error. They spoke during a tour through Oregon and Washington to promote the president's economic agenda.

"The number-crunchers will do their job. The president's job is to make sure we're creating as robust an environment as possible for job-creation," McClellan said. "That's where his focus is."

"This is economic modeling. ... some have said it would be lower," he said.

"The president has said he is not a statistician. He is most concerned about whether people are hurting and able to find jobs," McClellan said.

"The economy is moving in the right direction ... but there is more to do," he said.

[Rspaight]

If you're not reading the press briefing transcripts over at whitehouse.gov, you really should. They're a scream.

On the topic above:

Q When you dismissed the premise of John's question by saying, people can debate the numbers, let's be realistic here, the debate is going on between your Council of Economic Advisors and Treasury Secretary John Snow. Are there people here in this White House who never believed that forecast?

MR. McCLELLAN: Look, John, I think that the Council of Economic Advisors puts out an annual report on the economy; it's the President's Economic Report. And they do that every year. They've been doing it for some 20 years now. That's based on economic modeling and the data that is available at that point in time. The President is interested in the actual number of jobs being created, and the President is interested in making sure that everybody who is looking for a job can find one. That's where the President's focus is.

That's why I say people can debate the numbers all they want, but the President is going to be looking at the actual numbers of jobs being created. And the number of jobs being created is growing. The number is up. New jobs are being created. The economy is certainly moving in the right direction. And my point to John was that the last thing we need to do right now is raise taxes. And we need to focus on the policy decisions that are being made here in Washington, D.C. to create as robust an environment for job creation as possible. And that's where the debate ought to be focused.

Q But it would appear, though, that people very high up in this administration didn't have a whole lot of faith in the forecast of the report that went up to Congress just a week ago in terms of the job creation numbers.

MR. McCLELLAN: Again, it's an annual economic report that is put out by the administration based on the economic modeling and the data that's available at that point in time.

Q Can you answer the specific question, though? Was this report -- was the prediction of this many jobs, 2.6 million jobs, vetted prior to publication by the entire economic team?

MR. McCLELLAN: It's an annual report, David. It goes through the usual -- it goes through the usual --

Q That's not the question. Was it or was it not vetted by the entire economic team?

MR. McCLELLAN: It's an annual report. It goes through the usual --

Q So you don't know, or it was, or it wasn't?

MR. McCLELLAN: Can I get -- can I finish that sentence?

Q When you answer the question. Let's hear it. What's the answer?

MR. McCLELLAN: The answer was, it is an annual economic report and it goes through the normal vetting process. And if you would let me get to that, I would answer your question.

Q -- the full economic team vetted the prediction --

MR. McCLELLAN: It's an annual economic report. It's the President's Economic Report. But again, the President --

Q Just say yes or no --

MR. McCLELLAN: -- it goes through the normal -- it goes through the normal vetting process.

Q So the answer is, yes. I'm not done yet, I've got another one.

MR. McCLELLAN: Okay.

Q Why -- if you're suggesting that people will debate the numbers, that's kind of a backhanded way to say, oh, who cares about the numbers. Well, apparently, the President's top economic advisors do, because that's why they wrote a very large report and sent it to Congress. So why was the prediction made in the first place, if the President and you and his Treasury Secretary were going to just back away from it?

MR. McCLELLAN: Well, one, I disagree with the premise of the way you stated that. This is the annual Economic Report of the President and the economic modeling is done this way every year. It's been done this way for 20-some years.

Q So why not -- why aren't you standing behind it?

MR. McCLELLAN: I think what the President stands behind is the policies that he is implementing, the policies that he is advocating. That's what's important.

Q That's not in dispute. The number is the question.

MR. McCLELLAN: I know, but the President's concern is on the number of jobs being created --

Q My question is, why was the prediction made --

MR. McCLELLAN: -- and the President's focus is on making sure that people who are hurting because they cannot find work have a job. That's where the President's focus is.

Q Then why predict a number? Why was the number predicted? Why was the number predicted? You can't get away with not -- just answer the question. Why was that number predicted?

MR. McCLELLAN: I've been asked this, and I've asked -- I've been asked, and I've answered.

Q No, you have not answered. And everybody watching knows you haven't answered.

MR. McCLELLAN: I disagree.

[Ron]

Still wish I could watch this guy in action, but I refuse to install yet another media player. Don't get me wrong: I *love* this McClellan guy and I'd hate to see him go. It's like watching a Dean Martin [WH press] and Jerry Lewis [McClellan] routine, which is cool as comedy teams have become rather passe. But what I can't figure out is why the WH has allowed this spectacle to go on for so long. They can't find someone whose evasion skills are any better than this?

[chrischross]

Pay no attention to the lack of jobs, nothing to see here, move along now. The electorate needs to concentrate really hard on gay marriage and other pressing social issues.

In order to acommodate population growth, the economy has to create somewhere near 130,000 jobs per month. The administration's response is to say things like "Outsourcing is good for the country" or "You just need job retraining" --- what in fields like information technology that are rapidly being offshored?

What you're seeing here is cheap labor conservatives continuing to have the upper hand in the labor/management game.

[Patrick M]

So, Bush is not interested in none of that book learnin' economic models B.S. He's interested in actual jobs and the suffering of the unemployed. How noble. I guess we should make those tax cuts permanent, cause they're working marvelously.

Has anyone actually heard what jobs we're supposed to be retraining for? Lou Dobbs can't seem to get a straight answer on this.

[Rspaight]

Here's one way to create manufacturing jobs -- reclassify fast-food kitchen workers as "manufacturing."

In the New Economics: Fast-Food Factories?
By DAVID CAY JOHNSTON

Published: February 20, 2004

Is cooking a hamburger patty and inserting the meat, lettuce and ketchup inside a bun a manufacturing job, like assembling automobiles?

That question is posed in the new Economic Report of the President, a thick annual compendium of observations and statistics on the health of the United States economy.

The latest edition, sent to Congress last week, questions whether fast-food restaurants should continue to be counted as part of the service sector or should be reclassified as manufacturers. No answers were offered.

In a speech to Washington economists Tuesday, N. Gregory Mankiw, chairman of the president's Council of Economic Advisers, said that properly classifying such workers was "an important consideration" in setting economic policy.

Counting jobs at McDonald's, Burger King and other fast-food enterprises alongside those at industrial companies like General Motors and Eastman Kodak might seem like a stretch, akin to classifying ketchup in school lunches as a vegetable, as was briefly the case in a 1981 federal regulatory proposal.

But the presidential report points out that the current system for classifying jobs "is not straightforward." The White House drew a box around the section so it would stand out among the 417 pages of statistics.

"When a fast-food restaurant sells a hamburger, for example, is it providing a 'service' or is it combining inputs to 'manufacture' a product?" the report asks.

"Sometimes, seemingly subtle differences can determine whether an industry is classified as manufacturing. For example, mixing water and concentrate to produce soft drinks is classified as manufacturing. However, if that activity is performed at a snack bar, it is considered a service."

The report notes that the Census Bureau's North American Industry Classification System defines manufacturing as covering enterprises "engaged in the mechanical, physical or chemical transformation of materials, substances or components into new products."

Classifications matter, the report says, because among other things, they can affect which businesses receive tax relief. "Suppose it was decided to offer tax relief to manufacturing firms," the report said. "Because the manufacturing category is not well defined, firms would have an incentive to characterize themselves as in manufacturing. Administering the tax relief could be difficult, and the tax relief may not extend to the firms for which it was enacted."

David Huether, chief economist for the National Association of Manufacturers, said he had heard that some economists wanted to count hamburger flipping as manufacturing, which he noted would produce statistics showing more jobs in what has been a declining sector of the economy.

"The question is: If you heat the hamburger up are you chemically transforming it?" Mr. Huether said.

His answer? No.