Reclaiming Common Sense

Which President is the Jobs President?

The monthly employment situation report for January was released this past Friday. The report was overshadowed by the "Nunes Memo" on the Trump Dossier. This is unfortunate. There were big stories to be found in the Jobs Report. The first article written this past Friday was "January Jobs Surprise." The surprise wasn't that there were 200,000 "jobs" added to the economy. The surprise was that the data for 2016 and 2017 were revised in such a way that the 2017 data was revised up by over 200,000 seasonally adjusted workers. This "stole" those same people from the January data. The headline private sector number could have been reported at 452,000 workers instead of 196,000 (the other 4,000 were in the government sector.) The second article written on Saturday morning was "Seriously Strong January CPS Jobs Data." The first article examined the Current Employment Statistics (CES data.) The second article examined the Current Population Survey (CPS) data. The CPS data measures the workforce population, the number of part-time workers, the number of full-time workers, and the number of unemployed workers. There were only one change in the CPS data, the rate of growth in the population. The Workforce population spiked, bringing down the workforce participation rate. The question is how are we doing compared to other Presidents during their first year?

President Trump has added 2.4 Million Full-time jobs. This is sizable. He has also overseen the trimming of the unemployment levels by nearly 1 million workers. The "problem" is that unemployed workers are participants. This means that the Workforce participation rate is lower now than when he took office. Notice that there have been two upwards revisions to the workforce population.

President Clinton added 3 Million Jobs his first year - Part-time Jobs.  President Clinton also trimmed unemployed workers. Look at the population growth - it was less than President Trump - in part because the economy was smaller back then, in part because they did not revise the population numbers often under President Clinton. When they did revise it, it was at the end of his Presidency and it was big. If you compare the two economies, President Trump has added more Full-time Jobs and reduced the unemployment levels more.

President Reagan inherited a recession, and it showed in his numbers. The number of unemployed workers grew by 1.4 million workers. There were 950,000 fewer full-time workers and 641,000 more part-time workers than he had during his first full month in office.

President George W. Bush inherited a Recession, and it showed in his numbers, too. Remember that President Bush came into office during January 2001 and we had the terror attacks of September 1, 2001. That event sent ripples through the economy after the "dotcom" crash at the end of 2000. President Bush lost over 1.6 million full-time jobs. This was worse than President Reagan. President Bush had a larger base with which to wok than President Reagan. What was unexpected was that part-time jobs also fell. Often when employers sense a recession coming they trim full-time jobs and boost part-time jobs.

President Obama Lost over 5 million Full-time Jobs. Unemployment spiked by over 3 million workers. Part-time jobs surged by 1.4 million jobs. Where President Trump has seen two upward revisions in his workforce population number, President Obama saw a downward revision to the population during his twelfth month. All of the Presidents added to the workforce population during their first year in office. The downward revision to President Obama's workforce population stopped his participation rate from falling further than it already had fallen. The upward revisions to President Trump's population number have muted the underlying improvement in the workforce participation rate.

What is really happening? The workforce participation numbers dropped for four of the five Presidents. Only Clinton had a higher participation rate after twelve months. The may have been more participation because more people were working part-time.  The non-seasonally adjusted unemployment rate popped up to 4.49%. The unemployment rates for Presidents Reagan, Clinton. Bush and Obama were 9.43%, 7.34%, 6.32%, and 10.56% Respectively. The participation rates matter. Right now the effective unemployment rate, factoring in the missing participants as unemployed workers, means that the "real" or effective unemployment rate is well over 8%. If you compare where Presidents Reagan and Trump started President Trump is doing better than President Reagan was doing.

The jobs market is doing well. Unemployed workers are finding full-time jobs. Part-time workers are finding full-time jobs. We have seen more full-time jobs added under President Trump than under any of his predecessors during their first twelve months in office, going back to Reagan. People with full-time jobs will spend more money at the restaurants and stores. More money in the economy means more money for business and more profits.

It's the economy.