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Home Publications Blogs Beat the Press April's Job Growth Was Not "Strong"

April's Job Growth Was Not "Strong"

Saturday, 08 May 2010 07:46

Apparently our news stories are being written by people too young to remember the 90s and unable to find anyone with the competence to look up the data. The economy added 290,000 jobs in April. It is important to note that 66,000 of these jobs were temporary jobs associated with the 2010 census. There is nothing wrong with census jobs, but the point is that these are temporary and have nothing to do with the underlying strength of the economy. So, we can ignore that fact and boast about 290,000 jobs, but if we are then going to be consistent, we should be sure to ignore the loss of these temporary jobs in July and August.

Of course, ignoring that these are temporary jobs generated by the census would give us a poorer understanding of the economy, but would at least be consistent. What is not consistent is ignoring that these jobs are temporary now and then highlighting their loss in July and August. We'll see.

But, back to the fundamental issues. Is 290,000 jobs in a month (224,000 excluding the census jobs) strong job growth coming out of the worst downturn in 70 years. Well the economy created more than 250,000 jobs a month in the years from January 1996 to January 2000. If we adjust for the larger labor force, it generated 400,000 jobs a month for the year following the employment trough of the 74-75 recession and 420,000 jobs a month for the year following the 81-82 recession. Put another way, if we assume an underlying rate of growth of the labor force of 100,000 a month, then it will take 80 months (6 2/3 years) to make up the job deficit from the downturn at the current rate of job growth. Now, let's go celebrate!



Comments (10)Add Comment
written by Bill, May 08, 2010 1:42
Obviously, we must keep things in perspective. I am sure some of the press needs beating, but you are repeating numbers I've read from several mainstream sources. The point you should be making is that this isn't a recession like others. Yes, bubbles often pop. But, add to this our eroding foundation (manufacturing, middle class, global economy) and the weak recovery should be expected. With that in mind, I will celebrate the numbers and hope a gradual growth will continue. Are you asking for another bubble?
written by Doug, May 08, 2010 4:25
Thanks for the perspective Mr. Baker.

It will be positive news when they create 700,000 jobs per month to match the jobs we lost during Q1 2009.
written by urban legend, May 08, 2010 5:05
Of course, since continued improvement requires consumer confidence to build, if we keep telling people how good news really isn't good news, it becomes a self-fulfilling prophecy.

Seems to me there are always qualifying factors, but for this type of quantification it's only the big number that matters. In any shift of momentum, the initial rate of change is small. You don't compare one of the first months in an upturn to an entire year's worth of improvement.

In the first four months of the upturn in 1996, the employment-population ratio only increased by 0.3 percentage points. In this one, it's up 0.6 in the first four months. That's the most important statistic, and it looks hopeful to me.
written by Queen of Sheba, May 08, 2010 7:17
Let's not look a gift horse in the mouth, shall we? The trick is to keep the deficit hawks locked in the barn long enough for the good news, conditioned as it is, to become less conditional and sustained. The hawks will snatch this baby from its crib if they're not shot down.
written by AndyfromTucson, May 09, 2010 9:58
I see the economy as being like someone who has had a heart attack. We have just reached the point where the patient is still in the ICU with tubes and monitors hooked up to them, but their vital signs have stopped crashing and have started to marginally improve, and they now face a long period of convalescence and disability before they are back to normal. Like relatives in an ICU waiting room there is bound to be much celebration about the fact that the downward slide has stopped. It will only be later, when people start to forget the days they were peering into the abyss, that people will start to get impatient with slow pace of recovery.
written by richard, May 09, 2010 7:21
Do we really want unbridled growth? Can mother earth sustain it? Perhaps, we can increase job growth by shortening the work week, work year, or giving longer vacations.
That was expected
written by Horeca Jobs, August 15, 2010 10:39
Most of us Never Expected much growth 'this time of the season', it will take another small year. Let's work for the Best! ;) Horeca Careers inZen Jobsite
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Do we really want unbridled growth? Can mother earth sustain it? Perhaps, we can increase job growth by shortening the work week, work year, or giving longer
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About Beat the Press

Dean Baker is co-director of the Center for Economic and Policy Research in Washington, D.C. He is the author of several books, his latest being The End of Loser Liberalism: Making Markets Progressive. Read more about Dean.