“Well there are larger things we can do. Obviously the American Jobs Act, all economists agree, would have a marked effect on economic growth and would create millions of jobs. We just have to get the Congress to act on it.”
— David Axelrod, senior campaign strategist to President Obama, on CNN’s “State of the Union,” October 30, 2011
During an appearance Sunday on CNN’s “State of the Union,” the president’s long-time adviser made a statement that jumped out for fact checking. “All economists,” he said, agreed that the president’s jobs plan would “create millions of jobs.”
We’ve never known economists to agree on anything. So what are they actually saying about the president’s (stillborn) jobs initiative?
The White House has refused to release its own estimate of the potential jobs that would be created, preferring instead to point to private surveys such as one by Mark Zandi of Moody’s Analytics.
That survey concluded that Obama’s plan would add 1.9 million jobs in 2012 and cut the unemployment rate by a percentage point. Another firm Macroeconomic Advisors, weighed in with an estimate of 1.3 million jobs by the end of 2012.
An even more optimistic survey was done by the labor-backed Economic Policy Institute, which in a “quick look” estimated a boost of 2.6 million jobs over two years, as well as saving 1.6 million jobs, for a total gain of 4.2 million.
So far, so good. EPI is definitely “millions,” and the other two are certainly more than a million. But, like we said, economists rarely estimate in lockstep.
TD Economics, for instance, came up with an estimate of 800,000 jobs. And then Bloomberg News surveyed 28 economists, including some mentioned above, and came up a with a radically different figure — an average of 275,000 jobs would be added or saved in 2012.
That’s right — one quarter of a million, not “millions.”
A slightly larger sample of economists — 34 — did agree the plan would help avert a return to another recession, and Axelrod also made the case that economists agreed the plan would have a “marked effect” on economic growth.
But the 28 economists who offered predictions on job creation varied widely on the plan’s potential impact.
Five economists, in fact, said no jobs would be created — and one said only 1,000 jobs would be added or saved in either 2012 or 2013. Two economists even said at least 300,000 jobs would be lost in 2013, after some job growth in 2012.
Only four of the economists surveyed by Bloomberg, in fact, estimated that 1 million or more jobs would be created or saved in 2012. (EPI was not part of the Bloomberg survey.) If you also include 2013, the number of economists grows to eight.
The Pinocchio Test
Axelrod was on safe ground when he said economists believed the plan would be positive for the economy. He even might have been able to get away with saying “many” economists estimated than more than a million jobs would be created.
But instead he made the sweeping claim that all economists had agreed that “millions” of jobs would be created. In fact, of the 30 estimates we could find, only nine even crossed the million-job threshold over a two-year period.
Maybe in baseball a .300 average is considered good. Axelrod could have avoided this rating with a little more modesty about the job-creation figures — which, after all, depend heavily on assumptions and estimates in the first place.
Check out our candidate Pinocchio Tracker