March 6, 2004
NO ONE VOTES HIS NEIGHBOR'S PROBLEMS:
This recovery's not broken (Larry Kudlow, March 6, 2004, Townhall)
[T]he Labor Department's household survey -- which counts the number of all Americans who are actually working -- now stands at 138.3 million, an all-time high. The previous peak came way back in January 2001 at 137.8 million. Since the end of 2002, 1.8 million more people have gone back to work. Another impressive number.There continues to be much debate and confusion about the importance of this household survey, from which the unemployment rate is determined, and the corporate payroll survey, which is rising, but at a slower-than-hoped-for pace. Economists have traditionally focused on the unemployment rate as a measure of economic health. But in this political season, the softer payroll survey has received the lion's share of coverage.
Virtually no one cites the increase in the entrepreneurial army of self-employed and independent contractors who have gone to work at lower tax rates, enabling them to keep more of what they earn. This is why the unemployment rate quickly fell from 6.3 percent when the Bush tax cuts were implemented last spring to 5.6 percent today. The media are trying to discredit this drop as it is scored in the more promising household survey, rather than the more pessimistic payroll tally.
But what matters is the vast 94.4 percent of the working population who are laboring and prospering. Prospering. Family net worth, according to latest Federal Reserve release, has soared to a record high of $44.4 trillion, driven mainly by rising stock market and home prices. This, of course, represents the investor class -- today's most powerful electoral voting bloc.
One thing's for sure: The U.S. economy is booming. Outsized profit gains at lower investment tax rates have produced a boom in business-capital spending. Consumers are also keeping spending at a relatively steady 3 percent to 4 percent pace. A variety of job-linked variables, such as manufacturing factory orders, work weeks and delivery times are all rising rapidly. All these suggest that new job creation is on the way.
It'd be helpful if those jobs came before the Fall. Posted by Orrin Judd at March 6, 2004 8:45 AM
It'd be helpful mainly because it'd leave the Democrats with nothing to talk about.
The standard gauge of unemployment has always been the unemployment rate. But they can't mention the unemployment rate because it's down sharply since last summer. So they harp on the fact that there are fewer jobs than when Bush took office, while ignoring the more relevant fact that there are more workers. Liberal think tanks churn out papers "proving" that the household survey is worthless, hence the unemployment rate is meaningless. And when the jobs finally do come, I have no doubt they'll find plenty of reasons why the payroll survey is suddenly wrong too.
It's hard to see how the other economic numbers can continue to trend up without the job figures being dragged along within the next 3-4 months, which is all that really matters. The undecideds aren't going to even pay attention until the summer, so barring any major war on terror occurrace that gets them to focus earlier than normal, the February unemployment and job creation figures will be as forgotten to the general public as those 1975 "Whip Inflation Now" buttons.
Posted by: John at March 6, 2004 10:30 AM