August 6, 2004

Bush Economy: Highest Total Employment in American History

The July jobs report is out and it's being spun as bad news for the President by people who don't understand how the data is collected and calculated. The media is reporting that only 32,000 jobs were created in July. But that's not true, for a number of reasons.

First, the 32,000 figure has a statistical quirk in it: July is one of two months, the other being January, that the government statisticians simply assume that a certain percentages of businesses fail, and they reduce the jobs-growth estimate by tens of thousands of jobs to account for it. According to the New York Post's John Crudele, a year ago that lead to the job-growth number being slashed by 83,000 jobs in July.

Second, the 32,000 figure reflects only "nonfarm payroll jobs," which means, roughly, jobs created by employers. This data come from the government's monthly "Payroll Survey," which generally misses small businesses, especially newer small businesses, and always misses self-employed people.

The real number you should focus on is this one: Total employment in America rose by 629,000 to 139.66 million people in July, based on the government's Household Survey, which is also the data on which the official unemployment rate is based. Unemployment dropped a tenth of a percent in July.

A few months ago on this blog I published numerous posts documenting the surge nationwide in the growth of the number of limited-liability corporations, one of the most popular forms of incorporation for the self-employed and for new entrepreneurs just launching their ventures. (My most recent post on the LLC surge is here.) And more recently I linked you to Jeff Cornwall's commentary on a Kauffman Foundation report that shows a resurgence of entrepreneurship among Americans, especially minorities but also among whites. As Cornwall noted, the Kauffman report showed that most entrepreneurs are starting businesses because they see an unfilled need in the marketplace, not because they are discouraged job-seekers.

The American economy is, more than ever, being driven by entrepreneurs, not by big corporations. That's why, more then ever, the jobs number that matters is the total employment number, not just the number of "nonfarm payroll jobs."

Here are some basic facts you need to know about the American economy under President George W. Bush:

The unemployment rate has fallen from 6.2 percent in July 2003 to 5.5 percent now.

The number of unemployed people has fallen from 9.1 million in july 2003 to 8.2 million now.

In Jaunary 2001, the month that George W. Bush took office, 135,999,000 Americans had jobs. By October of that year, the number of Americans with jobs had slumped to 134,562,000 - as the sudden negative economic impact of the 9/11 attacks combined with the economic slowdown that began almost a year before Bush took office (with the stock market collapse in April 2000) to cause unemployment to surge.

Today, 139,660,000 Americans have jobs, more than at any time in our nation's history.