The August Jobs Report Received a Lukewarm Reception
Record Level of August Jobs Ignored
The August Jobs Report was strong and weak at the same time. The article "August Jobs Report Reveals Record August Jobs Level" revealed that seasonally adjusted workers grew in all sectors August to August. It also revealed strong seasonally adjusted Current Population Survey Jobs growth, as well as the best CPS participation since August 2013 and the lowest August Unemployment Rate since 1969. The headline worker data was weaker than expected, except when you consider that all sectors have more workers than they had last August and all sectors received a pay raise from last August.
There was month to month growth in all but three sectors: Leisure and Hospitality (LAH,) Other Services (OS,) and Mining and Logging (M/L.) There was August to August growth in all sectors. This was expected. This was covered in "Aug. to Aug. Growth in All Sectors."
There has been a considerable discussion about the addition of jobs under President Trump during his first 31 months in office and Former President Obama's final three years. Last year it was President Trump's first 24 months and former President Obama's final two years. (Hint: That comparison was being made during October, during month 21 for President Trump. President Trump won the 24 vs 24 comparison.) How is President Trump doing compared to former Presidents Reagan, Clinton, George W. Bush, and Obama at the 31 months mark?
President Trump has overseen the addition of 9.1 million full-time jobs. This number is not being reported because this comes from the Current Population Survey (CPS) data and the headline data is from the Current Employment Statistics (CES) Data. It is also the non-seasonally adjusted (NSA) data that is recorded not the seasonally adjusted (SA) data that is reported. He has also overseen the trimming of 1.8 million part-time jobs and the reduction of 1.9 million unemployed workers. A drop in unemployed workers reduces President Trumps participant level by 1.9 million participants.
President Obama was net a negative 100,000 jobs after 31 months in office. The argument is that he inherited a recession. The thing that is forgotten is that the economy was growing at less than 1.0% during the fourth quarter of 2015 and the first quarter of 2016. That is about as close to a recession as you can get without being in a recession. There were 100,000 fewer total jobs for over 5 million potential new workers. This is why the supporters of former President Obama do not want to compare the first 31 months of the two Presidencies.
President George W Bush also inherited a recession and was up 2 .0 million jobs for 7.9 million more workers. It is interesting to note that at their same point in their Presidencies that former President Reagan had added 4.6 million potential workers, former President Obama added 5.1 million workers President Trump has added 5.4 million potential workers and yet former President Clinton only had added 4.8 million potential workers. Was former President Clinton's participation rate higher because his population growth was lower, earlier during his Presidency. That population level would be revised higher during his final year in office.
Former President Clinton oversaw the addition of 8 million full-time jobs during his first 31 months in office. The former President did not inherit a recession. The recession was over by the time his term started. He also oversaw the creation of 857,000 part-time jobs. He started with a smaller economy that what President Trump inherited. This means that President Trump has added more FT jobs than former President Clinton after 31 months in office and that Clinton has added more total jobs that President Trump. President Trump and former President Clinton are also the only two Presidents of the five that saw unemployment fall during their first 31 months in office.
Former Presidents Reagan and Clinton, and President Trump are the only Presidents to see participation rise during their first 31 months in office. Former President Reagan saw unemployment rise, full-time jobs rise, and part-time jobs rise. Former President Reagan saw the creation of 4.568 million full-time jobs, 460,000 part-time jobs and the addition of 1.665 million unemployed workers. The thing to note here is that former President Reagan increased participation while increasing unemployment while President Trump has increased participation while decreasing unemployment.
Participation Matters. There has been considerable noise made about how Participation fell under former President Bush after rising under former President Clinton. It was two Internet memes regarding President Obama being the biggest job creator since former President Clinton, and former President Bush reduced participation while former President Clinton increased the participation rate, that led to the creation of the "Four Presidents" series.
- Reagan: 65.11% participation, 9.17% Unemployment
- Clinton: 66.99% participation, 6.62% unemployment
- George W Bush: 66.35% participation, 6.01% unemployment
- Obama: 64.34% participation, 9.08% unemployment
- President Trump: 63.22% participation, 3.78% unemployment. "
If you hold the August participation rate constant with the participation rates of August 2000, the August with the lowest unemployment rate and one of the highest participation rates for the month of August, then the "Effective Unemployment" rates are:
- Regan 12.09%
- Clinton 6.98%
- Bush: 7.26%
- Obama 12.99%
- President Trump 9.53%
This means that none of the five Presidents were/are at full-employment. Full-employment has been customarily an unemployment rate under 5.0%. There should be 10 million more participants today than we have recorded. Some will argue that this is due to Baby Boomers retiring. The "Red, Gray, and Blue" series has "debunked" this economic urban legend. Last month the data indicated that even thoughteen participation spiked, those 16-19 and 20-24 years of age were under-participating while those over the age of 55 were "over-participating."
What does all of this mean? It is important to compare similar periods of time during a Presidency with other similar periods of time. Former President Obama left office with fewer full-time jobs during January of 2017 than we had nine and a half years earlier during July of 2007. Former Presidents Reagan, George W Bush (Bush 43,) and Obama were all re-elected with elevated levels of unemployed workers after 31 months in office. President Trump has added FT jobs and trimmed PT jobs while cutting unemployment levels. Only former President Clinton reduced unemployment while increasing jobs. The Presidents at this point in their Presidencies grew the number of jobs by
5.12% (Reagan,) 7.60% (Clinton,) 1.44% (GWB), and 4.84% for President Trump. Only former President Obama saw a 0.07% decline in jobs. We are not in a recession. We are still in an expansion.
It's the Economy.