February 6, 2011

NYT on +250k Jobs Report in 1984: ‘Surprisingly Strong Growth’ Despite ‘Recent Signs of Slowdown’

April 1984 was the U.S. economy’s 19th post-recession month while Ronald Reagan was President. It was a month during which the government initially reported that the unemployment rate remained at 7.7%, while the number of jobs added was 269,000. By the time the government made all its subsequent revisions over the next few years, the final jobs-added figure was 363,000.

On May 5, 1984, in an example of what Tim Graham at NewsBusters cited on Wednesday of the press’s poor economic reporting during the Reagan era, the New York Times’s Robert D. Hershey Jr. (link is to Proquest Database article copy, presented for fair use and discussion purposes) did what he could to downplay the good news, highlight the bad news, and create an impression that the good times might not last long, The report doesn’t have the intense negativity found in many press reports during the George W. Bush era, but there is definitely an undercurrent of surprise and disappointment that things were going so swimmingly:

(click on graphic for full-sized version)

NYT05051984onJobsReport

Comments:

  • Start with the headline. Reported employment growth was 269,000 (see bottom of third column). The Times creatively rounded down in its headline to 250,000. Since when does one round down to the nearest 50,000?
  • Hershey seemed genuinely stunned by the “the continued surprisingly strong growth in employment.” Why there was any element of surprise is a mystery to me. According to final figures from that era at the Bureau of Labor Statistics, April 1984 was the eighth consecutive month showing job growth of over 200,000, and the 12th in the past 13.
  • In a fit of what looks to be wishful thinking, the Time reporter wrote that “the economic recovery that began in late 1982 is not yet running out of steam” — as if it should have been, but for some reason wasn’t.
  • Hershey also alluded to “recent signs of (a) slowdown.” Slowdown, schmodown. Final growth stats from that era indicate that first quarter 1984 growth was an annualized 8.0%; the second quarter came in at 7.1%. We could use that kind of “slowdown” right about now.
  • And of course, great news couldn’t be reported without citing a factor that might come along and ruin things. The growth in payrolls “was cited as likely to put additional upward pressure on interest rates.” Although the Federal Reserve did raise its prime rate of interest shortly thereafter from 12% to 12.5%, by the end of the year the rate was down to 10.75%. Meanwhile, final figures indicate that the economy added over 2.3 million more jobs by year’s end.

By contrast, as noted this morning (at NewsBusters; at BizzyBlog), a pair of Associated Press reporters described a combination of a 0.4-point drop in the unemployment rate to 9.0% and the addition of 36,000 seasonally adjusted jobs in January 2011, the 19th post-recession month under President Obama, as “the latest sign that the economic recovery is picking up speed” and worked to create an impression of positive momentum: “But the swift decline in the rate could also lift confidence at a time when businesses and individuals are already spending more money, fueling more hiring and still-more spending.”

As this graphic shows, through the first six quarters of the post-recession Reagan Era, the economy added over 4.2 million jobs (over 4.1 million in the private sector). In the first six post-recession quarters under Obama, pending possible future adjustments, the economy lost 264,000 jobs, while gaining a “whopping” 44,000 in the private sector. In Month 19, as illustrated in the post, the Reagan era’s lead over the era of Obama lengthened by over 300,000 (363,000 vs. 36,000).

Almost a week before Hershey’s employment report treatment appeared, William Serrin at the Times wrote a 1,761-word report on the difficulties the long-term unemployed were enduring (“Plight of Unemployed Goes Beyond Figures”). Extensive establishment press treatments such as like Serrin’s have been very rare during the past two years. I wonder why?

Cross-posted at NewsBusters.org.

AP Pair’s Employment Report Howler: ‘More than half a million people found work in January’

Someone needs to tell the Associated Press’s Jeannine Aversa and Christopher Rugaber that just because the number of unemployed people declines, it doesn’t mean that they “found work.”

That must be what the pair believes. Their error-riddled and suspect supposition-driven Friday afternoon report, whose title predictably focused on the unemployment-rate drop while ignoring the pathetic increase in seasonally adjusted jobs, actually made that claim (bolds and numbered tags are mine):

Unemployment falls to 9 percent, lowest since 2009

The unemployment rate is suddenly sinking at the fastest pace in a half-century, falling to 9 percent from 9.8 percent in just two months [1] – the most encouraging sign for the job market since the recession ended.

More than half a million people found work in January. [2] A government survey found weak hiring by big companies. But more people appear to be working for themselves or finding jobs at small businesses. [3]

… The Labor Department survey of company payrolls showed a net gain of 36,000 jobs in January. That’s scarcely one-fourth the number needed to keep pace with population growth.

… the payroll survey (the source for the jobs number — Ed.), about 140,000 businesses and government agencies send forms to the Labor Department showing how many people are on the payroll and how many hours they worked. The payroll survey can be slower than the household survey (the source for the reported unemployment rate — Ed.) to recognize startup companies. [3]

… The government also said fewer jobs were created last year than first thought – a net 909,000, down from an estimated 1.1 million. [3]

Specific comments:

  • [1] — The “sinking at the fastest pace in half-century” claim should have been framed as “the fastest two-month decline in a half-century.” This phrasing was required, because in July 1983 during the Reagan presidence, the seasonally adjusted unemployment rate dropped from 10.1% to 9.4%. That month remains the fastest single-month decline since 1949.
  • [2] — Aversa’s and Rugaber’s “more than a half million people found work” assertion is flat-out false. You obviously won’t find it in the Establishment Survey, which was the source for January’s reported seasonally adjusted gain of 36,000 jobs. It’s not in the seasonally adjusted Household Survey either:

    BLShouseholdData0111SA

    While the number of unemployed decreased by 622,000, the number of jobholders only increased by 117,000. The rest (504,000) left the labor force. The only way these folks would have “found work” is if they all began to devote more time to household chores. The not seasonally adjusted figures show a steep and expected decline in the number of people working, mostly because January is the month when retailers let go of employees they hired to get through the Christmas shopping season.

  • [3] — It seems that Aversa and Rugaber are clumsily attempting to lay the groundwork for some kind of future assertion that President Obama’s “Startup America” initiative is why the economy and the job market came back. In writing that “The payroll survey can be slower than the household survey to recognize startup companies,” they seem oblivious to the fact that the government’s Bureau of Labor Statistics (BLS) already attempts to estimate business startups and terminations every month using its Birth/Death model, and that the government has been overly optimistic during the past two years in estimating job creation arising from small business startups. This is a primary reason why, as the AP pair wrote later, “fewer jobs were created last year than first thought.” Per BLS, the total adjustment to prior figures spread over roughly the past two years “was 452,000 (483,000 on a seasonally adjusted basis)” — something Aversa and Rugaber chose to underplay by solely identifying the 2010 effect.

If these guys tell you that the sun rose in the east this morning, I would suggest looking outside just to be sure.

Cross-posted at NewsBusters.org.

Positivity: Reagan’s Greatness

Filed under: National Security,Positivity,Taxes & Government — Tom @ 7:02 am

ReaganFrom a Weekly Standard rerun of a November 1997 Bill Kristol book review of Dinesh D’Souza’s Ronald Reagan: How an Ordinary Man Became an Extraordinary Leader:

… Reagan was, of course, a staunch anti-Communist. But his anti-communism followed from his patriotism. He was able to take the moral offensive against communism not only because he believed the Soviet Union evil, but because he believed America a force for good. The Reagan Doctrine–a determination to aid anti-Communist insurgents around the world was a hard-headed and shrewd means of weakening the Soviet empire. But, as D’Souza points out, “Reagan conceived of his doctrine primarily in moral terms.” He always emphasized the universal right to freedom and self-government. Unlike the sophisticates of his time (and ours), Reagan “defined the conflict between the West and the Soviet Union as fundamentally a moral conflict.” Indeed, “Reagan saw himself as doing nothing more than clarifying what America stood for and against.”

Reagan was confident that what America stood for was right. He was also confident–far more so than most conservatives–that his country would prevail. If he was remarkably prescient about the weakness of the Soviet system, that merely followed from his confidence in the American system. And it was Reagan’s confidence that made possible his boldness. Elected with barely 50 percent of the vote, at odds with the entire foreign-policy establishment, Reagan in his first term set out, in the words of Sovietologist Stephen Cohen of Princeton in 1983, “to abandon both containment and detente for a very different objective: destroying the Soviet Union as a world power and possibly its communist system.” (Cohen, of course, was condemning Reagan for pursuing a “pathological” strategy.)

But it was also Reagan’s confidence in America that permitted him, in his second term, to move aggressively to take advantage of what Gorbachev felt forced to do in response to Reagan’s tough first-term policies. For, as D’Souza reminds us, “at a time when no one else could, Reagan dared to imagine a world in which the communist regime in the Soviet Union did not exist.” Reagan dared to imagine such a world because he really did believe that the West would not merely contain communism, but “transcend” it.

The point of transcending communism was not simply to allow America to come home again. Reagan’s view of America implies a distinctive American role in a post-Cold War world as well. It implies an America that is militarily strong, morally assertive, and politically daring–in the service of advancing American interests and American principles in the world, and not because those principles are American but because they are morally superior to competing principles. …