Job gains? ???

Obama’s jobs statistic is overworked
By Glenn Kessler,


“The good news is, today, our businesses have created nearly 7 million new jobs over the past 38 months. Five hundred thousand of those jobs are in manufacturing.”

— President Obama, remarks on college affordability, May 31, 2013

During a speech calling on Congress to halt a hike in the student loan rate, President Obama referenced the creation of 500,000 manufacturing jobs since February 2010 as part of the opening sentence in a paragraph touting good news about the economy (“The housing market is coming back. The stock market has rebounded.”).

But there was something about that phrase that sounded familiar.

Here’s the president speaking to the Democratic National Convention on Sept. 6 (nine months ago):

“After a decade of decline, this country created over half a million manufacturing jobs in the last two and a half years.”

And here’s the president at the State of the Union address on Feb. 12 (four months ago):

“After shedding jobs for more than 10 years, our manufacturers have added about 500,000 jobs over the past three.”

It’s pretty rare to hear the same talking point regarding a job statistic month after month. What’s going on here?

The Facts

According to Bureau of Labor Statistics data, the low point in U.S. manufacturing was reached in February 2010, when there were just 11.46 million manufacturing jobs in the country. That was about 1.1 million fewer than when Obama took office — and nearly 2.3 million fewer than when the Great Recession officially began in December 2007.

Then manufacturing jobs began to rebound, thanks in part to the rescue of the auto industry. By July 2012, the number of manufacturing jobs had risen to 11.957 million, or just shy of a 500,000-job gain. That’s when it became part of the president’s campaign rhetoric.

But at that point, the number also stopped climbing and instead began bouncing around.

In August 2012, 14,000 manufacturing jobs were lost. In the next month, an additional 18,000 were lost. Then came several months of gains — followed by three months of losses. The preliminary numbers in the employment report released this month show a loss of 9,000 manufacturing jobs in April and 8,000 in May.

So, here we are, nearly one year later, and the United States is still stuck at a gain of 500,000 jobs.

More striking, rather than month-by-month figures, is the trend when year-to-year calculations are made:

Gain in manufacturing jobs

January 2012 to January 2013: +124,000

February 2012 to February 2013: +118,000

March 2012 to March 2013: +74,000

April 2012 to April 2013: +55,000

May 2012 to May 2013: +41,000

In other words, it’s a downhill trend — possibly headed to a zero gain in jobs over a 12-month period.

Alan Tonelson, a research fellow at the U.S. Business and Industry Council, notes that the manufacturing share of non-farm employment is now actually lower than it was in February 2010, because manufacturing has added jobs less than one-third as fast as the rest of the non-farm economy.

“No one doubts that U.S.-based manufacturing has experienced a very steep rebound from a deep recession,” Tonelson said, but “it has slowed to a crawl over the last year or so.”

White House officials insist the 500,000 figure is still a good news story. “This is something that is very different than what we saw in the last recovery,” one official said. “We are adding jobs now where we were losing jobs then.” But he conceded, “It is probably not going as fast as it should.”

The official noted that the manufacturing workweek is now about an hour longer than historical averages and that hundreds of thousands of jobs would be created if the workweek simply returned to normal.

The White House also provided a lengthy statement defending the president’s repeated use of this figure. “Since May 2012, manufacturing has continued to add jobs at a pace that — prior to this administration — was not seen since the 1990s, with an average of 3,000 new jobs per month for a total of 41,000 new manufacturing jobs,” the statement said. “More broadly, a wide range of outside analysts agree that the U.S. has become a more competitive location for production as a result of factors like increasing U.S. productivity, rising wages abroad, abundant and low-cost domestic energy, and the increased understanding of ‘hidden costs’ from far-reaching supply chains.”

The Pinocchio Test

While the president has long preferred to point to the gain in jobs since early 2010 — the low point in employment during his presidency — the fact remains that manufacturing employment is still about 600,000 jobs smaller than it was when he took office. That stands in stark contrast to overall non-farm employment — which is about 2 million jobs larger.

Moreover, the growth in manufacturing jobs has basically stalled over the past year. The president’s continued use of this 500,000-job statistic, even as other job stats keep improving, suggests the news is not as good as advertised. Without some presidential acknowledgment that manufacturing job growth has slowed in the past year, it might be time to retire this talking point. In the meantime, the president earns Two Pinocchios.

   Just 2? Lower wages here…and still 600,000 jobs less than when he took  office!!!!!