Mitt Romney’s new normal for job creation
“We should be seeing numbers in the 500,000 jobs created per month. This is way, way, way off from what should happen in a normal recovery.”
— Mitt Romney, May 4, 2012
The April jobs report, reporting that a disappointing 115,000 jobs were added to the economy, gave the presumptive GOP nominee a chance to demand that President Obama needs to do better.
But is Romney, speaking on “Fox and Friends,” setting too high a standard? Let’s examine the historical record.
Romney’s statement was not entirely clear, so we checked to see if the former Massachusetts governor really meant to suggest that 500,000 jobs a month was a “normal recovery.”
“Governor Romney was comparing today’s anemic recovery to robust recoveries of the past,” said Romney senior adviser Eric Fehrnstrom. “Government data indicates that 500,000 jobs per month is not an unreasonable expectation. We’re not willing to accept high unemployment and weak monthly jobs numbers as the new normal.”
Hmmm. We went to the Bureau of Labor Statistics Web site to see how common a 500,000 increase would be. We went back 65 years — Mitt Romney’s age — which gave us a total of 784 months to examine.
Given the imprecision of survey numbers, we also included any months that could be rounded up to 500,000. Months that exceeded 500,000 are in bold and those that just missed are in italics.
Here is what the data shows:
March 1950: 654,000 jobs
August 1950: 734,000 jobs
August 1952: 778,000 jobs
December 1959: 540,000 jobs
January 1976: 489,000 jobs
March 1978: 513,000 jobs
April 1978: 702,000 jobs
September 1983: 1,114,000 jobs
February 1984: 479,000 jobs
October 1987: 492,000 jobs
February 1988: 452,000 jobs
March 1994: 462,000 jobs
September 1997: 507,000 jobs
May 2010: 516,000 jobs
In other words, only nine times out of the last 784 months — a rate of slightly more than 1 percent — has the U.S. economy created more than 500,000 jobs in a month.
(UPDATE: Some readers wrote that we should have excluded recessionary months because Romney spoke of a “recovery,” but that makes little difference in the outcome. Using the business cycle data of the National Bureau of Economic Research to exclude recessionary months, the total number of months declines to 662. The number of months that topped 500,000 is still not much more than one percent of the total.)
Even if we include months that came close to 500,000 jobs, we only end up with a total of 14.
So 500,000 is anything but normal.
As the BLS records show, the economy under Obama’s watch actually achieved that rare event. But only once — in 1978 — has the economy topped 500,000 jobs two months in a row. That happened during the presidency of Jimmy Carter, who actually lost his reelection bid because he was perceived as having mishandled the economy.
The labor force was much smaller a half a century ago so achieving 500,000 jobs then was even more impressive. But even in the last three decades, exceeding 500,000 jobs in a month has been especially unusual. It’s only happened three times — an average of once a decade.
Most economists would say the pace of this recovery in general has lagged typical recoveries, in part of because of the steep decline in state and local government jobs. But Romney in this case is setting an unrealistic standard, calling for what would be an extraordinary recovery — not a “normal recovery.”
“Given the depths to which the economy has sunk, we should be seeing much more robust job growth,” Fehrnstrom responded to our analysis. “President Obama and his team will argue for something less, but we think America can do better.”
The Pinocchio Test
Certainly, the pace of the current recovery is a prime topic in this election. But it’s a stretch to claim that 500,000 new jobs a month is a “normal recovery.” A President Romney would certainly chafe at having to meet that standard, month after month.
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