The loss of the Olympics wasn’t Obama’s only bad news being cheered by conservatives last Friday. The other big headline was a worse-than-expected jobs report showing the number of job losses increased in September. Gleeful critics quickly pounced on the numbers as evidence that the stimulus isn’t working (although one WSJ blog cites the job losses approvingly as evidence that capitalism is working).
But what do Friday’s jobs numbers actually tell us? When the media makes an announcement of “increasing job losses,” they’re comparing it only to the previous month – and I’ve explained before why it’s dangerous to make inferences from short-term trends.
Here’s what the job losses look like if you look only at this month and last:
On this timeframe, it’s clear that the trend since Obama became President is a steady decline in the rate of job-losses. Some months are worse than the trend, and others are better, but overall, it looks like the stimulus is working. And the bulk of the actual stimulus (government spending on infrastructure and clean energy) is only just starting to kick in.
For an even clearer picture, we can include some of the Bush years (apologies for the small graph - Blogger's interface for inserting graphics is poor at best):
Highlighting September 2009 and 2008 in red shows that we lost fewer jobs this year than the same month a year ago. Moreover, even before the collapse of Lehman Brothers in September of 2008, we were losing about 137,000 jobs a month under Bush. It’s taken President Obama just a few short months, but we’re almost back to that rate. At the current rate, we should expect layoffs to stabilize in about four months. And again, the full impact of the stimulus won’t be felt until 2010. No wonder Obama is so calm in the midst of the media hoopla and progressive hand-wringing.
Once again, don’t listen to news stories about short-term events – instead, pay attention to the long-term trends.
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