Why Obama Is Always Talking About “Private Sector Jobs”

My latest video is from a talk I gave back in July at the RightOnline conference. I had 5 minutes to give a talk and I had something all planned out… until President Obama gave this speech in Cleveland. In this speech he stated:

Our businesses have gone back to basics and created over 4 million jobs in the last 27 months — (applause) — more private sector jobs than were created during the entire seven years before this crisis — in a little over two years

I decided to check him on his jobs claims and I summarized my findings in my talk, which I reproduced for this video.

I make 2 big points in this video:

    • Obama selectively chose specific dates to make his fairly weak jobs numbers look better
    • There is a more comprehensive jobs number (employment) that tells a very different story.

Deception Through Selection

And here is where I give a little more detail on what numbers I used. First a little background:

President Obama gave this speech on June 14, 2012, so at that time we were using the most recent BLS jobs report which had number up to May. Counting backward from there, that means Obama was counting from March 2010 to May 2012.

March 2010 – 106,914,000 private sector payrolls

May 2012 – 111,040,000 private sector payrolls (revised up 32,000 in later reports to 111,072,000)

Difference in Obama’s “27 month number” – 4.13 million private sector payrolls

I was assuming that when Obama said “before the crisis” he meant before we started losing jobs. That would put the “7 year” number from February 2001 to February 2008.

February 2001 – 111,623,000 private sector payrolls

February 2008 – 115,511,000 private sector payrolls

Difference in 7 years – 3.88 million private sector payrolls

As you can see, the Obama graph is a nice simply upward slope including only the part of his presidency where he gained jobs. In fact, he starts counting only after the jobs number completely bottomed out. If we look at the jobs record during his entire time in office, we get this chart

Is there any thing wrong with not counting those initial job losses? I don’t think so. I think it is a perfectly reasonable thing to do to say “let’s look at the strength of the recovery alone” and use that metric to count. But it is incredibly disingenuous of the Obama team to completely discount job losses for themselves but then turn around and count them in the comparison data point.

In the video, I point out that using “6 years before the crisis” or “5 years before the crisis” result in vastly larger numbers (6.4 million and 7.1 million respectively), but what I’m really interested in here (and what I’d like to expand upon) is comparing private sector payroll growth that Obama is touting to the private sector payroll growth under Bush.

I looked at this a couple months ago and was a little shocked to see the following chart, but here it is. Starting at the low point of private sector jobs growth, if we chart what I will (for simplicity sake) call the Bush recovery (starting in July 2003) and the Obama recovery (starting in March 2009) using the latest data, we get:

As you can see… the weird thing about this current recovery is how closely it is tracking to the previous recovery in terms of private payroll increases. For Obama to pretend he is substantially better than Bush on this metric is nothing short of fantasy.

The Larger Jobs Number (Employment)

Here is where things actually get really freaking weird. The Bureau of Labor Statistics (BLS) uses two numbers to count jobs. (See more about how the BLS counts jobs here)

The first one is the establishment data (B Tables) and this is a survey counts jobs by industry. Think of it as someone calling a bunch of businesses and asking “How many people do you have on payroll?” They directly sample over 100,000 businesses and it has a margin of error of about 100K jobs.

The second one is household data (A Tables) and this is a survey of households. Think of it as someone calling a bunch of people and asking “Do you have a job?” It samples about 60,000 households and has a much larger margin of error (400K jobs).

The establishment data is usually used for month-to-month job counts in part because it tends to be a much less volatile metric (household data can swing somewhat wildly). That’s why, when you hear about “X jobs gained last month”, they use the number from the establishment survey.

However, a weird thing happened in the 00’s with the household survey. If we take the private payrolls and compare them to what I’m going to call “private employment” (the A table employment number minus government jobs), we see a massive difference in the job count.

That’s a 3 million job difference between private payrolls and private employment. This is way outside the margin of error. Something happened there, althoughI’m not sure what. Maybe self-employment increased, or people made ends meet w/ irregular non-payroll income or farm employment jumped. I honestly don’t know and anything I say here is pure speculation. But there it is, clear as day.

This is why Obama focuses so much on private payrolls as the metric he uses. Most fact-check organizations are not savvy enough to notice that there is this huge discrepancy in the jobs data from survey to survey. They only think to check Obama’s statements against the private payrolls data, not the overall employment.

In contrast compare the chart above to the private payrolls vs private employment change since Obama’s inauguration.

As you can see, the change in both jobs numbers are nearly identical. If we add in government job losses, we actually get a negative number on employment change since his inauguration. This shows that something was happening in the last recovery that isn’t happening in this one. If you need further help with payroll, be sure to check this payroll accounting company in Singapore.

40 thoughts on “Why Obama Is Always Talking About “Private Sector Jobs”

  1. Political Math

    Nice analysis. Wondering if the labels in the bottom two charts are off – the text says “private employment”, and the label on the charts is “Employment-Govt”.

    The A info is interesting, and most reports on employment don’t use it, so I guess it’s best to at least stick with comparing apples with apples (Table B info).

    On another note we hear of job increases being lackluster – yes, private goes up, but public goes down, thereby bringing it all lower. Yet Republicans talk of small government. Seems small government would mean letting some government workers go. Would not the job losses in the public sector be a feather in the cap of Republicans? Or can they not find a way to play that without looking bad! Should Republicans actually applaud the shrinking government worker employment? Not bearing in mind that many families are destroyed in the process (a sad thing) Just wondering out loud.

    And for sure there is alot of self employment that goes in or not into these reports. Example – I just watched your video and there was an ad on it. If I clicked, you made a few pennies or dollars. That’s self employment. Where does that get counted?

  2. politicalmath Post author

    That was supposed to mean “Employment (minus) gov’t jobs”. Maybe I should update that chart.

  3. Carey Murray

    I see your point, but then I wonder if Bush should get credit for the jobs he created under no regulation. After all, he also created one of the worst economic disasters of our time. He was able to create those jobs, with no possibility of maintaining them. That doesn’t seem worthy of any kind of comparison.

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  5. Dan L.

    I understand the basis for this analysis and perhaps one is always comparing apples to oranges for these time periods. President Obama is citing these statistics on defense of, essentially, unfair attack comparisons that the weak recovery is his fault.

    There are so many factors in play with economic growth and job growth. Automation in this time makes adding employees less necessary. We haven’t seen this depth of job loss in nearly a century, and financially-based crisis tend to be more difficult to pull out of.

    So if Obama has picked a favored slice of time to place the economy’s performance in the best light, when his opponents are continually placing it in the worst light, I conclude that this is politics and what do you expect.

    Everyone agrees its been a tepid recovery in terms of job growth, but it’s been a great recovery for corporate profit growth. To Hutch — I don’t see an anti-Obama commercial here. The truth is somewhere in between. The recovery has been a B-/C+ for jobs and a solid A for business. If government job growth kept pace with private sector growth, it would be an A as well. Or, if government tax and spending policy had been adjusted, both would be B+ right now, and Obama would be cruising to re-election.

  6. Mark Borok

    I’m lousy at this kind of thing, but what I come away with is: Obama lied about his job numbers being better than the ones in 7 years of Bush’s presidency; they are actually just as good. Not really damning. Not something you can use as a talking point if you’re Mitt Romney. And of course, leaving out the jobs lost in the first year of his administration is perfectly valid, as he hadn’t had a chance to implement any of his policies yet. Leaving out the public sector jobs, as someone pointed out, is just another way of telling Republicans they can’t call for smaller government and then complain when that results in job losses.

  7. gmb92

    That’s an interesting and convoluted way to spin the numbers against Obama, but let’s break it down. First, you judge Obama’s statement as “technically accurate” but misleading. I would apply that to your analysis.

    1. At 3:38, you change the criteria from private sector jobs to overall jobs, which includes government jobs. We know government employment increased during the Bush years and fell during the Obama years, and that trend continued after the recession ended. Obama was not intending to say the government sector had made a recovery. It has been struggling.

    2. Also at 3:38, you are comparing about 3.5 years under Obama with 8 years under Bush, which is apples to oranges. A fair comparison would be 3.5 years from each. Let’s refocus again on private sector jobs (numbers in thousands)

    Jan. 2001 – Aug. 2004: 111,631 -> 109,984 = -1,647

    Jan. 2009 – Aug. 2012: 110,985 -> 111,400 = +415

    But if we are to judge a president’s record, it’s much more reasonable to not hold him accountable for his first year, as generally his policies don’t start taking effect that quickly. I never thought Bush deserved to be knocked for 2001.

    Jan. 2002 – Aug. 2004: 109,214 -> 109,984 = +770

    Jan. 2010 – Aug. 2012: 106,800 -> 111,400 = +4,600

    By that measure, it’s simply no contest. In fact, that is a fairly strong recovery in progress from a horrible recession.

    We can even add in the effect of Bush’s 8 years if you’d like.

    Jan. 2002 – Jan. 2010: 109,214 -> 106,800 = -2,414

    When was the last time a 2-term president presided over a net loss in private sector jobs?

    3. Household surveys and self-employed data

    Household surveys are always less precise and tend to be less reliable than the commonly-used payroll numbers. Self-employed can meaning earning a few dollars doing odd jobs. But the numbers are interesting enough. Notice that Bush’s increase happened almost entirely in his early years. Recall that the 1990’s were a big economic boom, with 20 million jobs (payroll numbers) created, increasing median household wealth. When the moderate-mild 2001 recession hit, and payroll jobs were lost, many Americans were well-positioned to start their own business. I personally knew more than one person who did this. This was not the case in 2009. The 2000’s weren’t much a boom for average Americans. Median income was stagnant and job growth was week, with cash tight. Many fewer had the resources to start their own business. One of the many differences with the Great Recession is that it came on the heels of a poor economic decade, not a very big boom.

    4. Carey Murray covers this. The jobs gained through 2007 were largely part of the bank/housing bubble and entirely unsustainable.

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  9. The answer is always 42.


    While I think this is a pretty good video at demonstrating the misleading use of statistics, its too bad they fall for the same trap themselves in the second half of it.

  10. the fume

    I saw your video on The Dish and really appreciated you pointing out the cherry-picking of data. So much so that I’m going to shut up at bars about the ‘real’ job record.

    But I also went to wikipedia and noticed on the main chart there they include jobs created since the beginning of the fiscal year along with jobs since inauguration, since a new president is working under the previous administration’s fiscal budget. And of course if you do that, Bush gets scored with all the losses of the crisis due to his budget ending in Sept/2009, and gets scored with net job loss over his 8 years.

    I guess there are so many ways to look at things that you can feel the data backs you from either end of the spectrum without thinking too wishfully.

  11. Mike Alexander

    By calling for a capital gains tax reduction that stimulated capital gains (i.e. rising asset prices). The cause of the 2008 panic, like all panics, was a sharp pullback (crash) from unsustainably high asset prices (asset bubble).

  12. Pingback: Obama’s Highly Misleading Claim About Private Sector Job Creation - Hit & Run : Reason.com

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  14. John Thacker

    2. Nope, not very convincing. You’re looking at very different points in the economic cycle. Essentially what you’re doing is giving Obama credit for being part of a sharper but quicker recession, and one that started before he took office. If you want to say that “it’s much more reasonable to not hold him accountable for his first year, as generally his policies don’t start taking effect that quickly,” then you’re saying that your own method is inaccurate and misleading. You’re punishing Bush because the recession that you agree is apparently “part of Clinton’s policies” (or, I’d argue, simply part of the economic cycle) started closer to Bush’s election than the recession at the beginning of Obama’s term.

    If neither President is responsible for their first year, then while you really can’t blame Obama for a recession that started a year before he took office nor Bush for a recession that started just as he did, you can’t give Obama extra credit because the recession’s job losses were already half over by the time he took office.

    I think that your method is more misleading.

  15. John Thacker

    However, while there are reasons to criticize your choice in 2., it’s certainly much better than the very misleading way that Obama has been presenting it.

    There are quite a lot of ways to present the data. I think that there are problems with picking an arbitrary date (whether date of inauguration or one year in), although I concede that there are problems with picking a date based on the job minimum and the economic cycle alone (even though I think in general it is fairer.)

    It’s really, really, misleading, though, to be like the President and use one method for himself (economic cycle) and another method for Bush (strict calendar date based).

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  17. John Thacker

    If you want to see a *really* different take on it, trying claiming that “Congress is more responsible than the President” and then compare GOP Congress from 1994 to 2000, split Congress from 2000 to 2002, GOP Congress from 2002 to 2006, Democratic Congress from 2006 to 2010, and split Congress from 2010 until now.

    Do that, and you’ll get the result that Republican control of at least the House or Senate is much, much better than Democratic control. Not sure it’s fair, either.

  18. Stuart

    Agree, this article misses the fact that we were loosing hundreds of thousands of jobs a month, BEFORE Obama took office. To look at the Bush chart above, you’d think he left office on an upswing. Not taking into account the job losses prior to Obama taking over, or the point you raised about Obama operating under Bush’s budget until Sept. 2009 is so disingenuous. SHAME ON YOU politicalmath, your as bad as the politicians! IMHO.

  19. Stuart

    The recession didn’t BEGIN at the beginning of Obama’s term, we were way off the cliff before he took office. As for the Bush/Clinton recession, may have just been cyclical, but you’d have to agree that the negative GOP tactics in the 2000 election helped push us into the 2001 recession.

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  21. Economic fact checker

    What you say makes non sense and their are no facts to support it. Capital gains rates have nothing to do asset inflation. I would recommend and basic understanding of economics before you post.

  22. Pingback: Parsing Obama’s Private Sector Jobs Record « A TowDog

  23. Kay B. Day

    Political Math Blog = National Treasure.

    I see a comment above about Bush’s “deregulation.” You have confused Bush with Clinton.

    Clinton’s econ adviser (who also served Obama) Larry Summers publicly took credit for the most sweeping deregulation in U.S. history.

    A Democrat, Sen. Chris Dodd, literally slipped an amendment into a bill during Clinton’s term that put the U.S. taxpayer on the hook for bailouts. That amendment was noted as a major enabler of the meltdown by a NYT financial writer in her bestselling book ‘Reckless Endangerment.’

    And it was Clinton who actually did the first bailout that Time magazine claimed ‘saved’ the world economy–Long Term Capital Management–a *hedge fund.* That one’s an lol for the most underreported story in recent times.

    Even Treas. Sec. Tim Geithner admitted the government’s key role in the meltdown when he testified before Congress, acknowledging the risk the GSEs presented.

    If you buy Dems’ talking points that it was Bush 43 who tanked the economy, you are being misled. Even Leftist writers have accepted it was a bipartisan deal, mainly led by Dem policies going back to FDR’s creation of a GSE in the 1930s, chiefly caused by government policy and aggression towards banks on broader community lending–NINJA loans.

    And btw, the Dodd-Frank bill still leaves us taxpayers on the hook for Fannie and Freddie and the debt is still not even booked.

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  25. Jane

    This is not intended to be rude, because I want to take you at face value as an Economic Fact Checker. However, your spelling and grammar discredits you; if you are the real thing, an economic fact checker, surely you have the know-how to fix this in your future posts. Of course we all have typos from time to time, but there are 3 in your short post, and that makes me hesitant to dig further to verify your position. This observation is offered in to help, not hurt.
    As for Mike’s statement, it made sense to me (a novice at economics), so I would have been interested in hearing your explanation, in lieu of Mike’s, to Jay’s question.

  26. Soge

    This may a tad ironic, but you only use the labor statistics through August of the final year. I’m not sure if that counts as nitpicking, though I wonder how the numbers might change if you were to use include the remaining months.

    Also no one ever claimed that Bush was a shining example of presidential prowess during an economic recovery. I don’t think he really did much of anything (but I also think that’s why we recovered so quickly).

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  28. Shawn

    Political Math Blog: Thank you for taking the time to explain this in a way that everyone can understand. I actually posted several links to your site in separate explanations concerning why the 5.4 Million job creation number Obama is touting is so egregiously false. Again – thanks! While, unfortunately, I don’t think many are; your site is an invaluable resource to anyone seeking fundamental facts without the associated spin.

  29. Shawn

    Kay, You rock. I couldn’t have said it better myself. And, that is not a statement I can frequently make.

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  32. Eric

    they are nearly impossible to understand – the Y-axis is not labelled and the labels on the data seem to be wrong and some of the text/paragrphs seem to have typos.

    I looked at the raw BLS data a few weeks ago. We barely have as many workers as we did 4 years ago. Bush had huge growth however (partly due to growth of gov’t which I dislike, but on the other hand, his deficits were MUCH smaller, it’s not as though he was borrowing more than we currently are to fund those gov’t jobs).

    I’m pretty sure I started from January of his first year versus January of Obama’s first year. BLS is down right now so I can’t double check.

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