Obama's Highly Misleading Claim About Private Sector Job Creation

Recently, President Obama has taken to claiming that "our businesses have gone back to basics and created over 4 million jobs in the last 27 months —more private sector jobs than were created during the entire seven years before this crisis — in a little over two years." This is technically true. It's also highly misleading.

That's because President Obama isn't making a fair comparison. Instead, as the author of the Political Math blog handily explains, he's carefully selecting date ranges that allow him to maximize the number of jobs he can take credit for creating while minimizing the number created under his predecessor, George W. Bush.

Obama's claim appeared at a June speech in Cleveland. And according to the Bureau of Labor Statistics, the economy did indeed add 4 million private sector payrolls in the previous 27 months. That takes us from March 2010 to May 2012. But why start the count there? Why not count all the way back to the beginning of Obama's presidency? Probably because if you did that, you'd also have to factor in the massive job losses that occurred in the first part of Obama's term. It's a highly convenient way to count. Via Political Math, here's a graph showing what that figure counts and what it doesn't:

OK, so it's convenient. But maybe it's fair. After all, the recession didn't begin under President Obama. So perhaps it's reasonable for a president to take credit for an eventual uptick in job creation if the economy was flagging during the first part of his term. You could say he engineered a turnaround out of a downward spiral.

Except that that's not how President Obama's comparison treats President George W. Bush's private sector jobs record. The seven years before the crisis that Obama's quote refers to encompass January 2001 through January 2008, which means that Bush is stuck with all the job losses that occurred during the first few years of his presidency. 

In other words, the statement is accurate enough. But Obama doesn't give Bush's private payrolls record the same benefit of the doubt that he gives his own. And it turns out that if you just compare the recoveries, they look remarkably similar. 

There's another reason Obama uses the metric he does. It relies on just one measure of employment: an establishment survey that mainly relies on data culled from businesses. But BLS also publishes a second measure of employment that relies on surveys of individuals. And on that measure, President Bush seems to have done much better. 

When Obama took office, his first budget director promised that this administration would play it straight when it came to the numbers. "The president prefers to tell the truth," said Office of Management and Budget head Peter Orszag, "rather than make the numbers look better by pretending." Maybe that's what the president prefers. But you'd hardly know it by what he actually says.