Anyone who doubts that economics is political should check out the latest Republican and Democratic gymnastics over the March jobs numbers. They are a case study in opportunism and inconsistency.
The government’s monthly employment survey, released last Friday, showed that payroll jobs rose an impressive 308,000 in March. The report, which also revised upward the payroll figures for January and February, inspired hosannas from the White House to Wall Street. President Bush immediately inserted the figure into his stump speech. “Today, the statistics show that we added 308,000 jobs for the month of March,” he said on the hustings in West Virginia.
Talk about flip-flops. The administration and its allies had spent the past few months trying to denigrate and discredit the Bureau of Labor Statistics’ establishment survey, from which payroll jobs figures are derived. While attacking the payroll figures, the administration tried to turn public attention to the so-called household survey, from which the unemployment rate is derived. In sharp contrast to the payroll survey, which has shown persistent job loss since President Bush assumed office, the household survey for much of the past two years has shown growth in the number of Americans working. Last October, I dubbed the Bush strategy of criticizing the less favorable jobs survey “antidisestablishmentarianism.”
The campaign against the establishment survey hasn’t made that much headway among mainstream economists. They—and many of President Bush’s critics—continue to insist that the payroll figures are both more comprehensive and more representative of the health of the labor market than the household survey. In February, Federal Reserve Chairman Alan Greenspan agreed, saying that “we have concluded that as best we can judge, the payrolls series is the more accurate number.”
Last Friday’s report showed what a difference a single number can make. Now that it is showing impressive job growth, the payroll survey—which the Bushies had faulted for its inability to pick up the formation of new companies and the rise in self-employment—has been suddenly redeemed in the eyes of the White House and its fellow economic travelers. (Some conservatives are sticking to their principles: Writing in the New York Times today, Tim Kane of the Heritage Foundation says the flaws in the payroll survey remain. Because of structural changes in the new economy, the growth in freelancing, and the surge in limited-liability corporations, “we should be prepared for the job numbers in the payroll survey to permanently look anemic compared to other measures.”)
At the same time the president is touting the payroll numbers, he and his team are ignoring the household survey they have been boosting. That’s because the household survey is now generating the more unpleasant figures. In March, the household survey measured job losses—not increases—and showed the unemployment rate ticking upward.
Democrats are flip-flopping in the other direction. Having cited the dismal payroll figures for months, Bush’s opponents now criticize that survey. Presumptive Democratic nominee Sen. John Kerry tried poking holes in the payroll data. “Almost 100,000 of those jobs were a one-time gain in the return of grocery workers who were striking,” John Kerry noted. “That’s hardly the creation of new jobs.” The Economic Policy Institute had been hammering Bush over payroll-job losses. Now EPI is citing the household survey figures, instead. Democratic house leaders—see this release from Rep. Elijah Cummings and these comments by House Minority Leader Nancy Pelosi—are switching sides to antidisestablishmentarianism as well.
Of course, the debate isn’t settled. One month does not a job recovery make. And by proclaiming once again the legitimacy of the payroll numbers, the Bushies may not be helping their cause much. Even if the economy enjoys several more months of strong job growth, it is likely Bush will wind up as the first president since Herbert Hoover to see the number of jobs fall in a four-year term.