Posted on 10/12/2004 7:47:06 AM PDT by branch1
Solid Jobs, Solid GDP Larry Kudlow (archive)
October 11, 2004 | Print | Send
U.S. job creation continued to move ahead at a steady pace with the announcement Friday that 96,000 non-farm payrolls were added to the economy. Over the past thirteen months 1.9 million new jobs have been created. The unemployment rate stands at a historically low 5.4 percent. One hundred forty million Americans are now working, a new U.S. record.
The brightest spot in the Labor Department’s September report is a 3.2 percent annual rate of increase for third quarter hours worked. This is the strongest quarterly rise in seven years. It probably foreshadows 5 percent real GDP growth for the third quarter, a number that will be released on the last Friday before the Tuesday presidential election.
At lower personal tax-rates more people are working, and they are working longer hours to produce more. This is consistent with supply-side thinking that lower taxes enabling people to keep more of what they earn generate new incentives for greater work effort.
As for wages, average hourly earnings have increased by 3.1 percent annually through September. This number has been steadily rising over the past year from a meager 0.8 percent increase registered in October 2003.
Since George W. Bush was elected President, 585,000 payrolls have been lost. However, 1.69 million more people are working today according to the Labor Department’s other jobs survey -- the household survey. Since the end of the recession in late 2001, 908,000 new payroll jobs have been created, but 3.4 million more people have gone to work since then, according to the household survey.
The Bureau of Labor Statistics argues that on a month to month basis the household survey is more volatile than the establishment payroll survey. However, longer-term trends for the population survey are significant.
In order to put the two surveys on a more comparable basis, the BLS has adopted a methodology that removes self-employed workers from the household survey and also takes out the multiple (and redundant) job tallies in the payroll count. As a rule of thumb, it is useful to split the difference between the two surveys in order to get a better sense of the real new jobs number.
Once you do this, you see that 553,000 jobs have been created during the Bush administration. Since the end of the recession, this method produces 2.2 million newly employed.
The Kerry campaign has defined the economy in terms of the weaker payroll survey numbers. But the most comprehensive measure of economic output is still the gross domestic product, adjusted for inflation. Hopefully, President Bush will emphasize GDP in the remaining weeks of the campaign. During the ten recovery quarters since the end of 2001, real GDP growth has averaged 3.4 percent, in line with its long-run post-WWII annual expansion average of the past 57 years. Over the past four quarters since the supply-side tax cuts legislated in the spring of 2003, real economic growth has jumped to 4.8 percent.
What’s more, personal income is growing at 5 percent over the past year. This measure includes wages, salaries, rents, interest, dividends, and Social Security payments. Like GDP, it is a comprehensive measure of the economy’s progress, especially in terms of individual and family economic power. Adjusting for inflation, real income has increased 2.6 percent over the past year, a hefty gain. Total compensation, which reflects wages, salaries, and non-cash and non-taxable benefits like healthcare, has grown 3.9 percent (adjusted for inflation) over the past year.
These are all solid numbers. They show a healthy and growing economic prosperity. Mr. Bush should use these data to rebut Sen. Kerry’s silly charge that this is somehow a Herbert Hoover economy.
John Kerry, as we know, has a fondness for Europe. But their GDP is growing by less than 2 percent. Their unemployment rate is close to 10 percent.
Bush has nothing to be ashamed of. The resilient, durable, free-market U.S. economy, bolstered by supply-side tax cuts, has in fact delivered the jobs and the goods. This is especially remarkable in view of all the negatives thrown at us, such as a busted technology bubble, a recession, massive corporate scandals, the 9/11 attacks, two wars, and more recently an oil-price shock. With all that, the U.S. economy is growing roughly three-times faster than Europe’s, with an unemployment rate that is only half what it is on the other side of the pond.
Hopefully Bush will hammer all these points home in Wednesday evening’s forthcoming debate.
I would be interested to know what these "new" jobs are paying? Are these 7 dollar an hour at Mac D's or are these 20 dollar an hour mfg, svc and/or white collar 50K a year and up jobs???...hmmmmmmm
Someone earning $7 an hour in a fast-food joint here in the U.S. has a higher standard of living than a middle-class Western European. Go figure.
difference?
makes a lot of difference to the person making 7 bucks an hour as opposed to fifty or sixty K! LMAO
difference?
makes a lot of difference to the person making 7 bucks an hour as opposed to fifty or sixty K! LMAO
...are you implying that President Bush is at fault for someone getting $7.00 an hour? That wouldn't be the fault of the recipient? He/She designs thier life in a way that thier value in the working place is $7.00 an hour than so be it! Want more $$? Earn it! Don't look to the federal government for it!
That is rarely the case. Most people who earn $7 an hour are paid $7 an hour because that is what their labor is worth. I was paid less than $3.50/hour in my first job, and can remember how fantastic it was to get a job that paid $5.50 a couple of years later. At no time back then did I ever consider myself "underpaid" for my work.
I just asked what these jobs are paying...
Now if you can't provide that information, I have nothing more to discuss with you...
Have a nice day! LOL
I'm basing that on the new people my company has hired in the last 12 months. I have no idea how accurate that is in terms of the economy as a whole, but it's probably more accurate than anything you'll get from any other source.
I don't have the specific quote or date but about a month ago Greenspan spoke to this point and stated that a major portion of the jobs being created were not burger flipping jobs and were actually reasonably paying jobs with benefits. Others may be able to add to this with more specifics as to the type of jobs they are. He said this in response to claims of the Dems that the jobs were minimum wage burger flipping jobs and he wanted to make the point that the growth is real and the direction is good.
Bullcrap.
"Perhaps you should stop feeling sorry for yourself?"
ROFLMAO
feeling sorry for myself...THAT IS HYSTERICAL!
I own my own business since I got out of college which I started from scratch.
Yea, I feel reeeeeeel sorry for myself! LMAO
Better get off those camels, Joe!!!
Read harder:
As for wages, average hourly earnings have increased by 3.1 percent annually through September.
Not sure why people seem to be attacking you for a simple question. The points that can be infered from your question are things that need to be answered and not avoided if this is a true economic recovery. I believe Greenspan has addressed this to some extent.
Manufacturing jobs support the creation of service jobs, therefore the creation of manufacturing jobs is key to a sustainable economy and a good question that needs an answer in regards to what type of jobs are they. There's an economic line of thinking that 1 manufacturing job will help support 4 service industry jobs. This is something the service jobs can't do, practically by definition.
Long story short, if the jobs are well paying manufacturing related jobs, the growth will continue into the forseeable future but if they are mostly service jobs then the growth will be short lived and the market will become saturated. This is a simple point and if anyone has actual economic numbers, it would be very helpful to this topic.
Where else in the world can someone who lives below the poverty line own a car, live in an air-conditioned home, and have access to medical care at the finest facilities in the world?
One need only look at the price of gasoline to know that the "adjustment" for inflation doesn't reflect reality anymore.
More bullcrap.
The reason the question about "what types of jobs are they" can never be accurately answered is that these jobs are never tracked accurately to begin with.
To illustrate this, I'll post a question for anyone who has an interest in this topic: What has been the primary factor in the decline in manufacturing jobs in the U.S. over the last few decades?
The person who answers this correctly gets an A+ in Labor Economics 101.
What part of that statement do you dispute?
You asked a legitimate question and I am sorry that too many people here feel that attacking you somehow satisfies as an answer. From what you hear from the democrats that all these new jobs are burger flipping jobs. There has been no evidence to support that claim at all. None. The only evidence to the contrary, would be maybe an average wage or wage increase as reported by labot statistics, which I do not have right now. Alan Greenspan said that the claim that these new jobs are burger flipping jobs is not credible about a month or two ago.
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