Bush's Job Growth: Worst of the Last 40 Years UPDATE

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Although the national economy is technically at "full employment" – meaning that all people who want to work can find jobs, the reality is Bush’s record of job creation is still the lowest of the last 40 years.  

For these numbers, I used total nonfarm jobs from the Bureau of Labor Statistics.

The dates are the dates of the official business cycles from the National Bureau of Economic Research

2/61 - 12/69
Beginning number of jobs: 65,588,000
Ending number of jobs: 78,740,000
Total Jobs Created: 13,152,000
Compound rate of establishment job growth: 2.09%

11/70 - 11/73
Beginning number of jobs: 78,650,000
Ending number of jobs: 86,320,000
Total Jobs Created: 7,670,000
Compound rate of establishment job growth: 3.15%

3/75 - 1/80
Beginning number of jobs: 85,187,000
Ending number of jobs: 99,879,000
Total Jobs Created: 14,692,000
Compound rate of establishment job growth: 3.35%

11/82 - 7/90
Beginning number of jobs: 99,112,000
Ending number of jobs: 118,810,000
Total Jobs Created: 19,698,000
Compound rate of establishment job growth: 2.39%

3/91 - 3/01
Beginning number of jobs: 117,652,000
Ending number of jobs: 137,783,000
Total Jobs Created: 20,131,000
Compound rate of establishment job growth: 1.59%%

11/01 - ?
Beginning number of jobs: 136,238,000
Ending number of jobs: 146,140,000
Total Jobs Created: 9,902,000Compound rate of establishment job growth: 1.26%

But there are further problems with Bush’s employment numbers.  The BLS uses a model called the "birth/death" model to account for new businesses that aren’t counted in the survey  This means the most recent job reports -- those over the last 6-9 months -- are probably too high:

The BLS surveys about 160,000 businesses in its sample model. There is an unavoidable lag between an establishment opening for business and its appearing on the sample frame and being available for sampling. Because new firm "births" generate a significant portion of employment growth each month, non-sampling methods must be used to estimate this growth. To make up for this, they add or subtract a certain number of jobs, called the birth/death (of new businesses) ratio.
......
Remember the jobless recovery of the first Bush term and the constant criticism about the poor economy? Why was the economy doing so well and yet job creation was so poor? It turns out that a great deal of the explanation is that the BLS underestimated the number of new jobs being created by small business. In the early years of the recovery, rather badly.

Likewise, the BLS data will overestimate jobs when the economy is slowing down.

As I pointed out yesterday wages are still barely keeping up with inflation, even though the economy is technically at full employment.  If the economy was really at full employment, we should be seeing far faster increases in pay.  But we’re not.  This indicates the employment numbers have a pretty good possibility of being optimistic, as explained above by the birth/death model adjustments.

And there is a compelling argument that lower-paying health care and social assistance jobs are the primary driver of job growth for this expansion.

But the very real problems with the health-care system mask a simple fact: Without it the nation's labor market would be in a deep coma. Since 2001, 1.7 million new jobs have been added in the health-care sector, which includes related industries such as pharmaceuticals and health insurance. Meanwhile, the number of private-sector jobs outside of health care is no higher than it was five years ago.

And here’s a chart from the author’s blog:

And higher paying manufacturing and information technology jobs have also suffered:

Manufacturing Jobs:

Information technology jobs:

No matter how you slice the job growth of the current expansion is the weakest the country has seen in the last 40 years.  The compound annual growth rate is the lowest we have seen.  And the higher-paying jobs lost have been replaced by lower-paying jobs, partially explaining why wages have been stagnant for this expansion.

Update [2007-7-24 15:27:14 by bonddad]:: As of 2:25 CST, the markets are selling off hard.  I'll have a wrap-up on my blog after the close.

I've now been informed by Google that my blog is a span blog.  I can't post on it right now, but as soon as Google releases my blog I will add the market update.