Austan Goolsbee says current recovery beats job creation record of George W. Bush recovery

On the heels of a disappointing jobs report, Austan Goolsbee, chairman of the Council of Economic Advisers for President Barack Obama, shined the best light he could on the administration’s economic record during the June 5, 2011, edition of ABC’s This Week with Christiane Amanpour.
   
Two days before his appearance, the government announced that the economy had created a net of only 54,000 jobs in May -- a number well below expectations, and also below the number of jobs created in the previous few months.

"I would just emphasize, the president's plan is putting us on the right track," Goolsbee told Amanpour. "Over the last 15 months, we've added more than 2 million jobs in the private sector. That's far in excess of what it was in the comparable period after the last recession."

We thought it was worth checking whether the current recovery is strong by historical standards. So we turned to the Bureau of Labor Statistics, the government’s official source for employment numbers.

Between February 2010 and May 2011 -- the 15-month period Goolsbee was referring to -- the U.S. economy created 2.1 million private-sector jobs. By contrast, following the previous recession, the economy actually lost 60,000 private-sector jobs during the equivalent period, which ran from August 2002 to November 2003.

So Goolsbee’s statistic was factually correct. But the Truth-O-Meter also gives weight to context, and we think there are some important bits of context that Goolsbee left out.

One concern we have is why Goolsbee offered the time frame he did. According to the official arbiter of recessions -- the National Bureau of Economic Research, a nonpartisan group of academic economists -- the most recent recession ended in June 2009. But Goolsbee’s statistic starts counting eight months later, in February 2010.

Why does this matter? It doubles the amount of jobs created during the Obama recovery. "In effect, he's saying let's forget all those bad months and just look at the good ones," said J.D. Foster, an economist with the conservative Heritage Foundation.

As we noted, using Goolsbee’s 15-month calculation, the economy produced a net of 2.1 million private-sector jobs. But if you count the full 23 months since the recovery officially began, this number shrinks to 980,000. (Using private-sector jobs in the first place also produces a more favorable number to the administration; over the full 23-month period, only 550,000 total jobs were created, due to major job losses in the government sector.)

Our second concern has to do with using the George W. Bush recovery as a point of comparison.

There’s little question that the Obama recovery is stronger than the George W. Bush recovery -- in large part because the Bush recovery was so anemic. Not only did the Bush recovery produce job losses during the 15-month period Goolsbee cited, but it also produced job losses over the full 23-month period. Over the first 23 months of the Bush recovery, the economy actually lost 757,000 private-sector jobs and 577,000 total jobs.

But comparing the Obama recovery to other recoveries in recent decades results in a more mixed picture. We looked at the aftermaths of recessions that ran from July 1990 to March 1991, President George H.W. Bush; from July 1981 to November 1982, under President Ronald Reagan; and from January 1980 to July 1980, under President Jimmy Carter.

The recoveries following the George H.W. Bush and Ronald Reagan recessions were more notably robust in both private-sector and total jobs created than the current recovery has been. The recovery after the Reagan recession was especially strong, with 6.5 million private-sector jobs created.

For additional context, it’s also worth looking at what percentage of the recession-related job losses were gained back during the first 23 months of the recovery.

By this measure, the Obama recovery has gained back 12.7 percent of the private-sector jobs lost during the recent recession (and 7.3 percent of all jobs lost in the recession). This is far better than the George W. Bush recovery -- which, as we noted actually produced job losses -- but when it comes to private-sector jobs, the current recovery has been weaker than the three earlier recoveries.

You get a similar assessment if you compare job creation statistics during the recovery to the size of the labor force. The total job gain over the first 23 months of the current recovery amounts to about one-third of 1 percent of the size of the labor force at the start of the recovery. Once again, the George W. Bush recovery produced job losses, and the recovery from the Carter recession was also low, at two-hundredths of 1 percent.

But the recoveries from the Reagan recession (6.1 percent of the labor force) and the George H.W. Bush recession (1.1 percent) were significantly stronger than the current recovery.

Where does this leave us? Goolsbee’s facts are correct -- job creation during the past 15 months far exceeds the job creation seen in the previous recovery. He compared the current recovery only to the prior one, which was easily the weakest in recent U.S. history. But while this is somewhat misleading, Goolsbee was careful to make a very specific claim. More worrisome is that he used cherry picking to help make his point. He ignored the first eight months of the current recovery, in which a significant number of jobs were lost. On balance, we rate Goolsbee's statement Mostly True.

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Kristi Noem

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