Wednesday, March 7, 2012

We're Not Out of the Woods Yet

Some more good news for today! ADP released its monthly private sector payrolls report, and guess what? Pretty decent news! The private sector added 216,000 new jobs this past month. Now this is just ADP's report--the official Bureau of Labor Statistics report doesn't come out until Friday morning, but still, encouraging news. 

So what exactly does the ADP report measure? Well, it notably excludes government payrolls, so this is just covering strictly the private sector. So when Friday's news comes it'll include government payrolls, which unfortunately, due to cutbacks at state and local levels, are liable to actually put a bit of a drag on the report, but not by very much, hopefully.

Anyways, how does this month's jobs report measure up to average job growth during periods of prosperity? Well, let's take a look at average job growth under the past two administrations, Clinton's and Bush's. All of my data are from the BLS, should you be interested.

First, let's start with Clinton's job numbers, which, for the sake of clarity, I'll be measuring from January 1993 to January 2001. Throughout that time, the economy added a grand total of 23.05 million jobs, averaging out to about 240,100 jobs per month created.

The Bush years are a bit more complicated, because the dot-com bubble burst and there was a recession between 2001 and 2003, and the economy started shedding jobs in late 2008 as the financial crisis was reaching fever pitch. So here's what I'm going to do: first, I'll do the pure, unadulterated numbers from January 2001 to January 2009. Then, I'll cut out the job losses from the dot-com recession and the 2008 financial crisis, so that people get an idea of the "good years" of job growth between 2003 and 2007.

Anyways, here's how the data measure up: 

January 2001 to January 2009: 1.08 million net jobs created, with an average of 11,250 jobs added per month. Now, this is obviously muddied by both recessions, so the next bit of data will be from June 2003 to December 2007, effectively cutting out both recessions.

June 2003 to December 2007: 8.142 million net jobs created, with an average of 148,036 jobs added per month. 

So, just for the sake of comparison, we're beating the Bush year job creation average while still technically being in a recession, which is a good sign, but we've not topped the Clinton years average. Hopefully Friday will likewise yield encouraging news in the labor markets. Even at this rate of job creation, however, it should be noted that it would still take years to return to full employment. There's more work for us yet.