U.S. Budget and Economy

A reader of my prior post suggested that it takes time for an economic policy to have an effect and that the analysis of the effect of a president's policy should be lagged by two years. While the idea that some effects of a policy require a two-year lag has merit, I know of no evidence that all effects require the passage of two years to begin. Some effects may begin as soon the the election result or the passage of certain policies becomes known. Hence, the following table shows annual job growth with a one-year and two-year time lag as well as no time lag. In addition, it shows job growth if the first two years of a president's term are skipped, assuming that they are effected by both the prior and current president's policies. So as to skip as little time as possible, the table looks at job growth by party, combining consecutive terms where the presidency is held by the same party. NONFARM AND HOUSEHOLD SURVEY EMPLOYMENT GROWTH BY PRESIDENTIAL PARTY (percent a...

As mentioned in my prior post , the Bureau of Labor Statistics released the August employment report on September 5th. Using that data, I updated my July 13th post regarding job growth under Bush and prior presidents. Since I plan to continue updating this post, I've now placed it permanently at http://www.econdataus.com/empterm.html . Following is an updated graph of the data: As before, the data covers the 15 presidential terms since 1949. In almost every term of a Democratic president, the growth in household survey, nonfarm, and private employment was greater than the growth in the labor force. Conversely, in almost every term of a Republican president, the growth in household survey, nonfarm, and private employment was less than the growth in the labor force. The only two exceptions in the 15 terms were Carter and Reagan's second term. A related fact is that the unemployment rate went down during almost every term of a Democratic president and up during almost every...

On September 5th, the Bureau of Labor Statistics released the August employment report. Following is the first paragraph of their Employment Situation Summary for August : The unemployment rate rose from 5.7 to 6.1 percent in August, and non-farm payroll employment continued to trend down (-84,000), the Bureau of Labor Statistics of the U.S. Department of Labor reported today. In August, employment fell in manufacturing and employment services, while mining and health care continued to add jobs. Average hourly earnings rose by 7 cents, or 0.4 percent, over the month. The 6.1 percent unemployment rate is the highest since September of 2003 and is just slightly below the prior peak of 6.3 percent reached in June of 2003. One reason why the unemployment rate increased so much last month is revealed by the next paragraph in the Summary: Unemployment (Household Survey Data) The number of unemployed persons rose by 592,000 to 9.4 million in August, and the unemployment rate increased by ...