February 19, 2004

Economy Update: Backpedaling Forward

Democrats are abuzz over recent statements from the White House that what matters isn't the prediction of job growth, but actual signs of economic improvement - some bloggers are rather taken with the notion that the White House "backtracked" on its prediction of 2.6 million new jobs this year, although it's actually the Associated Press that used that phrase. What the White House did was refuse to get drawn into a debate over a prediction, knowing that if they affirmed the number it would become not a prediction but a promise and if a mere 2.5999 million jobs were created, the press and the opposition would hammer them for breaking a promise.

As presidential spokesman Scott McClellan said, it's reality that matters - actual people getting real jobs and earning real incomes - not some prediction in a book.

"People can debate the numbers all they want," McClellan said. "The President is interested in the actual number of jobs being created, and the President is interested in making sure that everybody who is looking for a job can find one."

The Democrats want to debate predictions - because they don't want to talk about the various actual signs that the economic recovery is getting ever stronger. For instance:

The Conference Board's Index of Leading Economic Indicators rose a healthy 0.5 percent in January.

Evidence continues to build that the U.S. economy is strengthening - including on the jobs front. The Conference Board said Thursday that its Composite Index of Leading Economic Indicators rose 0.5 percent in December to 115.0 following gains of 0.2 percent in December and 0.3 percent in November. The index is closely watched because it forecasts trends in the economy in the next three to six months...

"I think we're building the base for a sustained recovery," [Daniel J. Meckstroth, chief economist for the Manufacturers Alliance/MAPI] said.

Let me remind you of what the Joint Economic Committee of Congress said just 10 days ago about the economy - that it is posed for "strong and sustainable growth":

The recovery continues at a strong pace. Payrolls increased by over 100,000 jobs in January, as activity in manufacturing and services industries accelerated. Last year closed with the economy growing at a 4% annual rate and productivity growing at a 2.7% annual rate, well above long-run averages. Inflation remains benign, allowing the Federal Reserve to maintain short-term interest rates at historical lows, and recent tax relief continues to benefit consumers and businesses. Forecasters see continued robust growth, low inflation, and accelerating job gains throughout the year.